AMENDED, RESTATED AND CONSOLIDATED CONVERTIBLE NOTE

 

                                                                   EXHIBIT 10.38

      THIS AMENDED, RESTATED AND CONSOLIDATED CONVERTIBLE NOTE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, HAVE NOT BEEN REGISTERED UNDER ANY STATE
SECURITIES LAWS, AND ARE SUBJECT TO A SUBSCRIPTION AND INVESTMENT REPRESENTATION
AGREEMENT. THEY MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED,
PLEDGED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF EITHER AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER THE
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO BIG BUCK BREWERY & STEAKHOUSE, INC. THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE
STATE SECURITIES LAWS.

               AMENDED, RESTATED AND CONSOLIDATED CONVERTIBLE NOTE

$1,623,885.26                                                  Detroit, Michigan
Maturity Date:  October 1, 2000                  Date of Note:  February 4, 2000

INDEBTEDNESS

      FOR VALUE RECEIVED, the undersigned, BIG BUCK BREWERY & STEAKHOUSE, INC.,
a Michigan corporation, f/k/a Michigan Brewery, Inc. ("Borrower"), promises to
pay to the order of WAYNE COUNTY EMPLOYEES' RETIREMENT SYSTEM, a body politic of
the State of Michigan or any successors and assigns ("Holder"), at its offices
at 400 Monroe Street, Suite 320, Detroit, Michigan 48226, or at such other place
as the Holder hereof may designate in writing from time to time, the principal
sum of One Million, Six Hundred Twenty Three Thousand, Eight Hundred Eighty Five
and 26/100 Dollars ($1,623,885.26) 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.

AMENDMENT, RESTATEMENT AND CONSOLIDATION OF NOTES

      This Amended, Restated and Consolidated Convertible Note ("Note") amends
and restates and consolidates and makes one note the following (i) Installment
Business Loan Note dated July 28, 1995 in the original principal amount of One
Million Eight Hundred Seventy-Five Thousand ($1,875,000) Dollars given by
Borrower in favor of Bank One, Michigan, formerly known as NBD Bank ("Bank
One"), (ii) Installment Business Loan Note dated July 28, 1995 in the original
principal amount of Eight Hundred Thousand ($800,000) Dollars given by Borrower
in favor of Bank One; and (iii) Master Demand Business Loan Note (Replacement)
dated July 28, 1995 in the original principal amount of Three Hundred
Twenty-Five Thousand ($325,000) Dollars given by Borrower in favor of Bank One
(Collectively, the "Bank One Notes"), which Bank One Notes were endorsed to
Holder and the Bank One Notes are hereby amended and restated in their entirety
and consolidated by this Note.

RATE OF INTEREST

      So long as there is no Event of Default or default hereunder or under the
Security Instruments (as defined below), the principal balance of this Note
shall bear interest at the rate of ten percent (10%) simple interest per annum
("Contract Rate") during the term of this Note.

      If Borrower does not make timely payments as provided in the Note, a late
payment fee in the 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 or
default hereunder or under the Security Instruments, as hereinafter defined,
Holder shall have the right and option to charge interest on the then
outstanding principal balance of this Note at a default of 4% 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

      The principal and interest due under this Note shall be amortized on a
basis of a 25 year amortization schedule with a lump sum of balloon payment
required on the Maturity Date (as defined below). Borrower shall make an
interest only payment on March 1, 2000. Thereafter, Borrower shall make payments
of principal and interest in the amount of $14,756.26 commencing on the first
day of April, 2000 and continuing on the first day of each and every month
thereafter until October 1, 2000 (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 installment
of principal and interest will be due on the Maturity Date.

      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 ("Currency"), unless and to the extent
Holder exercises Holder's option hereunder to convert all or part of the unpaid
principal balance of this Note into shares of common stock, par value $0.01 per
share (the "Shares"), of the Borrower.

CONVERTIBLE NOTE

      At any time prior to payment in full of this Promissory Note, Holder shall
have the option to convert all or part of the unpaid principal balance of this
Note into that number of Shares of the Borrower (the "Option") equal to (i) all
or such part of the unpaid principal balance of the Note being converted divided
by (ii) $2.42, which is the average of the closing sale price of one Share as
quoted by The NASDAQ Stock Market for the five trading days immediately prior to
the Borrower's execution of this Promissory Note (the "Conversion Price"),
subject to the antidilution adjustments presented in the following paragraph,
any fractional Shares to be paid in Currency. To exercise the Option, Holder
shall surrender this Note to the Borrower, accompanied by written notice of
Holder's intention to exercise the Option, which notice shall set forth the
principal amount of this Note and such portion of the unpaid principal balance
of the Note, if not the entire unpaid principal balance, to be converted into
Shares (the "Notice of Conversion"). Within ten (10) business days after
Borrower's receipt of the Notice of Conversion and Holder's surrender of this
Note, Borrower shall deliver or cause to be delivered to the Holder, the Shares
in the name of the Holder and a duly executed, new note in the principal amount
of the balance thereof, if any.

      If the Borrower shall at any time hereafter subdivide or combine its
outstanding Shares, or declare a dividend payable in its Shares, the Conversion
Price in effect immediately prior to the subdivision, combination, or record
date for such dividend payable in Shares shall forthwith be proportionately
increased, in the case of combination, or proportionately decreased, in the case
of subdivision or declaration of a dividend payable in Shares, and the number of
Shares into which the unpaid principal balance of this Note may be converted
upon exercise of the Option immediately preceding such event, shall be changed
to the number determined by dividing

the then current Conversion Price by the Conversion Price as adjusted after such
subdivision, combination, or dividend payable in Shares and multiplying the
result of such division against the number of Shares to be acquired upon the
exercise of the Option immediately preceding such event, so as to achieve an
Conversion Price and number of Shares purchasable after such event proportional
to such Conversion Price and number of Shares purchasable immediately preceding
such event. All calculations hereunder shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be. In case of any capital
reorganization or any reclassification of the Shares, or in the case of any
consolidation with or merger of the Borrower into or with another corporation,
or the sale of all or substantially all of its assets to another corporation,
which is effected in such a manner that the Holders of Shares shall be entitled
to receive stock, securities, or assets with respect to or in exchange for
Shares, then, as a part of such reorganization, reclassification, consolidation,
merger, or sale, as the case may be, lawful provision shall be made so that the
Holder of this Note shall have the right thereafter to receive, upon the
exercise hereof, the kind and amount of shares of stock or other securities or
property which the Holder would have been entitled to receive if, immediately
prior to such reorganization, reclassification, consolidation, merger, or sale,
the Holder had held the number of Shares into which the unpaid principal balance
of this Note could have been converted upon exercise of the Option. In any such
case, appropriate adjustment (as determined in good faith by the Board of
Directors of the Borrower) shall be made in the application of the provisions
set forth herein with respect to the rights and interest thereafter of the
Holder of this Note, to the end that the provisions set forth herein (including
provisions with respect to adjustments of the exercise price) shall thereafter
be applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the exercise of the Option.

      In the event the Borrower shall at any time or from time to time, issue
Shares, options, warrants or rights to subscribe for Shares, or issue any
securities convertible into or exchangeable for Shares, for a consideration per
share (determined by dividing the Net Aggregate Consideration (as determined
below) by the aggregate number of Shares that would be issued if all such
Shares, options, warrants, rights or convertible securities were exercised or
converted to the fullest extent permitted by their terms) less than the
Conversion Price in effect immediately prior to the issuance of such options or
rights or convertible or exchangeable securities, the Conversion Price in effect
immediately prior to the issuance of such options, warrants or rights or
securities shall be reduced to an amount determined by multiplying such
Conversion Price by a fraction:

      a. the numerator of which shall be (X) the number of shares of Borrower's
      Common Stock of all classes outstanding immediately prior to the issuance
      of such options, rights or convertible securities (excluding authorized
      but unissued shares held by the Corporation but including all shares of
      Common Stock issuable upon conversion or exercise of any outstanding
      Convertible Preferred Stock, options, warrants, rights or convertible
      securities), plus (Y) the number of shares of Borrower's Common Stock
      which the total amount of consideration received by the Borrower for the
      issuance of such options, warrants, rights or convertible securities plus
      the minimum amount set forth in the terms of such security as payable to
      the Borrower upon the exercise or conversion thereof (the "Net Aggregate
      Consideration") would purchase at the Conversion Price prior to
      adjustment, and

      b. the denominator of which shall be (X) the number of shares of
      Borrower's Common Stock of all classes outstanding immediately prior to
      the issuance of such options, warrants, rights or convertible securities
      (excluding authorized but unissued shares held by the Borrower but
      including all shares of Common Stock issuable upon conversion or exercise
      of any outstanding Convertible Preferred Stock, options, warrants, rights
      or convertible securities), plus (Y) the aggregate number of shares of
      Borrower's Common Stock that would be issued if all such options,
      warrants, rights or convertible securities were exercised or converted.

      When delivered, all Shares shall be duly authorized, validly issued, fully
paid, and nonassessable. Borrower shall take any and all action necessary to
maintain the required authority to issue the Shares to Holder in the event
Holder converts, or is required to convert, the unpaid principal balance of this
Note into Shares.

PREPAYMENT

      Prepayment of the principal of this Note is permitted, in whole or in
part, without premium or penalty of any kind; provided Borrower provides Holder
with forty-five (45) business days' prior written notice of its intention to
prepay the principal of this Promissory Note, in whole or in part, during which
time Holder may exercise the Option by delivering to the Borrower Holder's
Notice of Conversion within forty-five (45) days following Holder's receipt of
such notice from the Borrower. All partial prepayments of principal shall reduce
the principal balance hereunder in reverse order of maturity.

SECURITY

      This Note is secured by a Mortgage dated April 25, 1995 which is a Future
Advance Mortgage, as amended by that certain Amendment to Mortgage dated July
28, 1995, and as further amended by that certain Second Amendment to Mortgage of
even date herewith (as amended, "Mortgage"), made by Borrower to NBD Bank, a
Michigan banking corporation, now known as Bank One, Michigan, and as assigned
to Holder, which Mortgage encumbers certain real property located in the City of
Gaylord, Otsego County, Michigan ("Project"), together with improvements,
personal property, collateral and rights with respect thereto, as more
particularly described therein, as well as a separate Assignment of Real Estate
Leases and Rentals with respect thereto, a mortgage dated of even date herewith
given by Borrower to Holder encumbering Borrower's leasehold interest in certain
real property located in the City of Auburn Hills, Oakland County, Michigan
("Leasehold Mortgage") a Subscription and Investment Representation Agreement, a
Continuing Security Agreement, a Security Agreement, Pledge Agreements, UCC
Financing Statements, Guarantees and other loan and security documents delivered
in connection therewith (hereinafter, all such loan and security documents and
agreements are sometimes collectively referred to as the "Security
Instruments"). Any Event of Default or default in any of the conditions,
covenants, obligations or agreements contained in any of the Security
Instruments or any other instrument securing and/or evidencing the indebtedness
of Borrower to Holder shall constitute an event default under this Note and
under that certain 10% Convertible Subordinated Promissory Note due February 4,
2003 in the principal amount of $5,876,114.74 given by Borrower in favor of
Holder ("Subordinated Note") and shall entitle the Holder hereof to accelerate
the entire indebtedness and amounts due hereunder, under the Subordinated Note
and under the Security Instruments and to take such other action as may be
provided for in the Security Instruments, at law or in equity. Any Event of
Default or default under this Note or the Subordinated Note shall be an Event of
Default or default under each of the Security Instruments.

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; provided however, such failure shall not
      constitute a default if the required payment is made within five days
      after the date it first became due and payable and such failure has not
      occurred more than two times in the preceding 12 months; or

      b. any Event of Default shall occur in the Subscription and Investment
      Representation Agreement for 10% Convertible Secured Promissory Note Due
      January 2003 between Borrower and Holder of even date herewith after the
      passage of any notice and cure period set forth therein;

      c. 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;

      d. 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;

then, and in any such event, so long as the same may be continuing, (A) if such
event is an Event of Default specified in Section (c) or (d) above with respect
to the Borrower, automatically all amounts owing with respect to the Agreement,
this Note, the Subordinated Note and the other documents executed in connection
herewith shall become immediately due and payable without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower and (B) if such event is any other Event of Default the Holder
shall by notice in writing to the Borrower, declare all amounts owing with
respect to the Agreement, this Note, the Subordinated Note and the other
Security Instruments to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower.

Borrower shall pay all costs and reasonable attorneys' fees incurred in
collecting or enforcing this Note, the Subordinated Note or the other Security
Instruments, 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.

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 officers and their respective personal
representatives, heirs and successors and assigns (which shall include, without
limitation, all subsequent owners of any interest in any of the collateral and
security provided by the Mortgage, the Leasehold Mortgage and other Security
Instruments) 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.

      IN WITNESS WHEREOF, Borrower has caused this Note to be executed on the
day and year first written above.

                            BIG BUCK BREWERY & STEAKHOUSE, INC.,
                            a Michigan corporation, f/k/a Michigan Brewery, Inc.

                            By   /s/William F. Rolinski
                              --------------------------------------------------
                                 William F. Rolinski
                                 President and Chief Executive Officer

 

Basic Info X:

Name: AMENDED, RESTATED AND CONSOLIDATED CONVERTIBLE NOTE
Type: Amended, Restated and Consolidated Convertible Note
Date: March 31, 2000
Company: BIG BUCK BREWERY & STEAKHOUSE INC
State: Michigan

Other info:

Date:

  • February 4 , 2000
  • March 1 , 2000
  • first day of April , 2000
  • October 1 , 2000
  • April 25 , 1995
  • July 28 , 1995
  • February 4 , 2003
  • January 2003

Organization:

  • State of Michigan
  • Interest Rate Limitation
  • NASDAQ Stock Market
  • Notice of Conversion and Holder
  • Board of Directors
  • Borrower 's Common Stock
  • Borrower Holder's Notice of Conversion
  • Borrower to Holder encumbering Borrower
  • Event of Default
  • Michigan Brewery , Inc.

Location:

  • Detroit
  • United States of America
  • City of Gaylord
  • Otsego County
  • City of Auburn Hills
  • Oakland County
  • Michigan

Money:

  • $ 1,623,885.26
  • $ 1,875,000 Dollars
  • $ 800,000
  • $ 325,000
  • $ 14,756.26
  • $ 0.01
  • $ 2.42
  • $ 5,876,114.74

Person:

  • sWilliam F. Rolinski

Percent:

  • ten percent
  • 3 % percent
  • 4 %
  • 10 %