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 Xxxxx X.X. 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
Xxxxx X.X. 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 Xxxxx X.X. be C.V. has consented to the
execution by Cerveceria Rio Xxxxx X.X. 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 Xxxxx X.X. 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 Xxxxx X.X. 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 Xxxxx X.X. 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 Xxxxx X.X. de C.V. is
authorized to pay to Cabo Distributing Company, Inc. the sum of $39,000.00
for past due xxxxxxxx. 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 Xxxxx X.X. be C.V. of the sum of Three Hundred Thousand
and no/100 Dollars
($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/ Xxxxx X. X. Xxxxxxxx
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Xxxxx X. X. Xxxxxxxx President
BY: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx, Secretary
Cerveceria Rio Xxxxx X.X. de C.V.
BY: /s/ Xxxxx Xxxxxxxx
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Xxxxx X. X. Xxxxxxxx, President
BY: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx, Secretary
Iniernacional de Mexico S.A. de C.V.
BY: /s/ Xxxxxxxx Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxxxxxx Xxxxx, President
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.
