Convertible Promissory Note



 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 
  

			
	US$500,000	  	December 30, 2008

 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 within thirty calendar days of the occurrence of the Event of Default and, at that time, indicate whether the Company further elects to be designated as the sole general partner of the Partnership. 
 4. Prepayment. The Company may prepay in whole or in part the principal and accrued interest of this Note. Any such prepayment shall be applied
first to the repayment of accrued fees and expenses under this Note, if any, then to the interest otherwise accrued until all such amounts have been paid in full, and then to the repayment of principal until all principal has been paid in full.

 5. Events of Default.  
 4.1
Each of the following events shall constitute an “Event of Default” of this Note: (a) the Company fails to make any payment when due under this Note on the applicable due date and has not made such payment within
five (5) days after written notice of such failure has been given on behalf of Partnership to the Company; (b) a receiver is appointed for any material part of the Company’s property, the Company makes a general assignment for
the benefit of creditors, the Company becomes insolvent, or the Company becomes a debtor or alleged debtor in a case under any U.S. or foreign bankruptcy code, act or statue, or becomes the subject of any other bankruptcy or similar proceeding for
the general adjustment of its debts or for its liquidation; (c) Company defaults in the performance or observance of any material, term, covenant, condition or agreement contained in this Note which such default, if capable of being
cured, is not cured by the Company within thirty (30) calendar days after notice thereof shall have been given by the Partnership to the Company; or (d) a final judgment or order for the payment of money in excess of Five Hundred
Thousand Dollars ($500,000.00) shall be rendered against Company and the same shall remain unpaid for a period of sixty (60) days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment,
or execution or similar process shall be issued or levied against a substantial part of the property of Company and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within sixty (60) days
after issue or levy. 
  

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 4.2 Upon the occurrence of any Event of Default, all accrued but unpaid expenses, or interest otherwise
accrued, all principal and any other amounts outstanding under this Note shall (a) in the case of any Event of Default under Section 4.1(b) become immediately due and payable in full without further notice or demand by Partnership
and (b) in the case of any Event of Default other than under Section 4.1(b), become immediately due and payable upon written notice by or on behalf of Partnership to the Company. 
 4.3 Partnership’s sole and exclusive remedy upon the occurrence of any Event of Default shall be as set forth in Section 2 of this Note.

 6. Transfer of this Note. This Note may not be transferred in whole or in part with the prior written consent of the Company; any such
transfer or assignment shall be void. 
 7. Miscellaneous. 
 7.1. Acknowledgement as to Business Purpose. The Partnership and Company acknowledge and agree that this Note is issued by the Company to the Partnership solely for commercial, investment or business
purposes as contemplated by Revised Code of Washington Section 19.52.080. 
 7.2. Successors and Assigns. Subject to the
exceptions specifically set forth in this Note, the terms and conditions of this Note shall inure to the benefit of and be binding upon the respective executors, administrators, heirs, successors and assigns of the parties. 
 6.3 Loss or Mutilation of Note. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, together with indemnity reasonably satisfactory to the Company, in the case of loss, theft or destruction, or the surrender and cancellation of the Note, in the case of mutilation, the Company shall execute and deliver to
Partnership a new Note of like tenor and denomination as this Note. 
 6.4 Notices. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be delivered personally or by facsimile (receipt confirmed electronically) or shall be sent by a reputable express delivery service or by certified mail, postage prepaid with return
receipt requested, addressed as follows: 
 if to the Company to: 
 venture counsel law international pllc 
 Attention: Christopher Evans, Esq. 
 601 108th Avenue NE, Suite 1900 
 Bellevue, WA 98004 
 Tel: 425.943.6953 Fax: 425.943.6801 
  

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 if to the Partnership: 
 Tully’s Coffee Asia Pacific Partners, LP 
 Attention: Tom O’Keefe 
 3100 Airport Way South 
 Seattle, WA 98134 
 Tel: 206.233.2070 
 Fax: 206.233.2077 
 Either party hereto may change the above specified recipient or mailing address by notice to the other party given in the
manner herein prescribed. All notices shall be deemed given on the day when actually delivered as provided above (if delivered personally or by facsimile, provided that any such facsimile is received during regular business hours at the
recipient’s location) or on the day shown on the return receipt (if delivered by mail or delivery service). 
 6.5 Governing
Law. The terms of this Note are governed by and are to be construed in accordance with the laws of the State of Washington, without giving effect to that body of laws pertaining to conflict of laws. 
 6.6 Waiver and Amendment. No right or obligation under this Note will be deemed to have been waived unless evidenced by a writing signed by
the party against whom the waiver is asserted, or by its duly authorized representative. Any waiver will be effective only with respect to the specific instance involved, and will not impair or limit the right of the waiving party to insist upon
strict performance of the right or obligation in any other instance, in any other respect, or at any other time. 
 6.7
Severability. The parties intend that this Note be enforced to the greatest extent permitted by applicable law. Therefore, if any provision of this Note, on its face or as applied to any person or circumstance, is or becomes
unenforceable to any extent, the remainder of this Note and the application of that provision to other persons, circumstances, or extent, will not be impaired. 
 6.8 Maximum Interest. Notwithstanding any other provisions of this Note, any interest, fees, or charges payable by reason of the indebtedness evidenced by this Note shall not exceed the maximum permitted
by law. 
 ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW. 
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 IN WITNESS WHEREOF, the Company has caused this Note to be signed on the date first written above. 
 ASIA FOOD CULTURE MANAGEMENT PTE., LTD. 

			
		
	Signature: 	 	 
	By:	 	Kouta Matsuda
	Title:	 	Managing Director, KM Prosperity Pte., Ltd.
		 	Its Manager

 ACCEPTED AND AGREED: 
 TULLY’S COFFEE ASIA PACIFIC PARTNERS, LP 

	
	
	  
	By:
	Title:

  

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