Exhibit 10.2
THIS NOTE AND THE SECURITIES INTO
WHICH IT MAY BE CONVERTED HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR SUCH LAWS
COVERING THE TRANSFER OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH TRANSFER IS EXEMPT FROM SUCH
REGISTRATION.
ASIA FOOD CULTURE MANAGEMENT
PTE., LTD.
CONVERTIBLE PROMISSORY
NOTE
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US$500,000
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December 30,
2008
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FOR VALUE RECEIVED, the undersigned,
ASIA FOOD CULTURE MANAGEMENT PTE., LTD. , a Singapore
private limited company (the “ Company
”), promises to pay to the order of TULLY’S COFFEE
ASIA PACIFIC PARTNERS, LP , a Washington limited partnership
(the “ Partnership ”), the principal
amount of $500,000 – FIVE HUNDRED THOUSAND US DOLLARS - plus
simple interest at a rate equal to 0.44% per annum, the rate
currently published for 3-month financial commercial paper for the
week ending December 26, 2008 by Federal Reserve Statistical
Release H.15, payable upon the Maturity Date (defined below).
Interest shall be calculated on the basis of actual number of days
elapsed over a year of 365 days. Notwithstanding any other
provision of this note (the “ Note ”),
the Partnership does not intend to charge and the Company shall not
be required to pay any interest or other fees or charges in excess
of the maximum permitted by applicable law; any payments in excess
of such maximum shall be refunded to the Company or credited to
reduce principal hereunder. All payments received by the
Partnership hereunder will be applied first to costs of collection,
if any, then to interest and the balance to principal.
This Note is entered into
contemporaneously with a promissory note issued by the Partnership
to Tully’s Coffee Asia Pacific, Inc. (“
TCAP ”), general partner of the Partnership
(the “ GP Note ”).
The following is a statement of the
rights of the Partnership of this Note and the conditions to which
this Note is subject to and to which the Partnership, by the
acceptance of this Note, agrees:
1. Maturity Date . The
principal and accrued interest on this Note shall be due and
payable on demand at the earlier of (i) five
(5) business days after the date that the Partnership has made
cash distributions, whether in a single distribution or series of
distributions, to Company in an amount equal to all principal and
accrued interest; or (ii) the time at which this Note
is made due and payable upon an Event of Default (as defined
below); provided , however that if the Event of
Default is cured as permitted in this Note, then the Maturity Date
shall not thereafter be deemed to have occurred with regard to such
Event of Default under this clause (ii) (collectively, clauses
(i) – (ii) shall be the “ Maturity
Date ”).
2. Non-recourse Nature of this
Note . This Note is secured by the net cash from operations
of the Partnership that are available to be distributed by the
Partnership to the Company pursuant to the Limited Partnership
Agreement between Company and TCAP dated December 21, 2007
(the “ Partnership Agreement ”) in
proportion to Company’s percentage of Partnership Interest
(as
defined in the Partnership Agreement). Upon the
occurrence of any Event of Default (defined below), then, until all
principal and accrued interest of this Note is paid in full, any
and all distributions, dividends or other cash payments otherwise
available to be distributed to the Company by the Partnership shall
be paid to the Partnership; this constitutes the
Partnership’s sole and exclusive remedy for an Event of
Default and precludes the exercise or enforcement by the
Partnership of any other right or remedy to which Partnership is
entitled by law or equity to enforce.
3. Conversion upon Default of
the GP Note . Upon the occurrence of any Event of Default
by TCAP as defined in the GP Note, the Company shall have the right
(but not the obligation) to convert all or a portion of outstanding
principal and accrued interest under this Note into additional
Partnership Interests (as defined in the Partnership Agreement)
based upon a US12,000,000 pre-money valuation of the Partnership.
Upon conversion of the Note into additional Partnership Interests,
Company shall have the additional right (but not obligation) to be
designated the sole general partner of the Partnership and the
Partnership Agreement shall be amended accordingly.
3.1 Notice of
Conversion . If the Company elects to exercise its right to
convert this Note into additional Partnership Interests, it shall
so notify the Partnership with
