kl06021_ex10-2.htm


    
      

    

     

    Exhibit
      10.2

     

    


    CREDIT
      LINE NOTE

    


    $1,050,000.00                                                                                                                                                   May
      31, 2007

    


    FOR
      VALUE RECEIVED, NEW WORLD
      BRANDS, INC., a Delaware corporation, (“Maker”),
      hereby unconditionally promises to pay to the order of P&S SPIRIT,
      LLC, a Nevada limited liability company, (“Payee”), at the offices of
      Payee at 2700 Lighthouse Point East, Suite 626, Baltimore, MD  21224,
      or at such other place as Payee or any holder hereof may from time to time
      designate, the principal sum of One Million Fifty Thousand
      Dollars  ($1,050,000.00), or the aggregate unpaid principal amount of
      all advances made or extended by Payee to Maker pursuant to the Loan Agreement
      (hereinafter defined),  in lawful money of the United States of
      America and in immediately available funds on or before June 1, 2011 (the
“Maturity Date”).

    


    Notwithstanding
      anything to the
      contrary contained herein or in the Loan Agreement (hereinafter defined), unless
      earlier paid in accordance with the terms and conditions of this Note, the
      entire unpaid principal balance of this Note and all accrued but unpaid interest
      shall be due and payable on the Maturity Date. The principal balance of this
      Note may be paid in full at any time or in part from time to time, provided,
      however, that all payments of principal of this Note shall be accompanied by
      the
      payment of all accrued and unpaid interest under this Note.

    


    The
      unpaid principal balance of this Note shall bear interest at a floating per
      annum rate equal to the “Prime Rate” as reported from time to time in the “Money
      Market Rates” section of The Wall Street Journal plus two percent (2%)
      per annum.  Any change in the interest rate hereunder as a result of a
      change in the Prime Rate shall become effective on the date of said
      announcement.  Maker agrees to pay consecutive monthly installments of
      interest only, commencing on July 1, 2007, and continuing on the first Business
      Day of each succeeding calendar month, with a final payment of all unpaid
      principal and accrued but unpaid interest, late charges, and other fees and
      charges being due and payable on the Maturity Date, unless paid earlier as
      provided below.

    


    For
      purposes hereof, (a) the term
“Event of Default” shall mean an Event of Default as such term is defined in the
      Loan Agreement, and (b) the term “Loan Agreement” shall mean the Credit Line and
      Security Agreement, dated of even date herewith, between Maker and Payee, as
      the
      same now exists or may hereafter be amended, modified, supplemented, extended,
      renewed, restated, or replaced.  Unless otherwise defined herein, all
      capitalized terms used herein shall have the meaning assigned thereto in the
      Loan Agreement.

    


    This
      Note is issued pursuant to and is
      subject to the terms and provisions of the Loan Agreement to evidence the Credit
      Line by Payee to Maker.  This Note is secured by the Collateral
      described in the Loan Agreement and all notes, guarantees, security agreements,
      and other agreements, documents, and instruments now or at any time hereafter
      executed and/or delivered by Maker or any other party in connection therewith
      (all of the foregoing, together with the Loan Agreement, as the same now exist
      or may hereafter be amended, modified, supplemented, renewed, extended,
      restated, or replaced, being collectively referred to herein as the “Financing
      Agreements”), and is entitled to all of the benefits and rights thereof and of
      the other Financing Agreements.  At the time any payment is due
      hereunder,

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    at
      its
      option, Payee may charge the amount thereof to any account of Maker maintained
      by Payee.

    


    If
      any payment of principal or interest
      is not made when due hereunder, or if any other Event of Default shall occur
      for
      any reason, or if the Loan Agreement shall be terminated or not renewed for
      any
      reason whatsoever, then and in any such event, in addition to all rights and
      remedies of Payee under the Financing Agreements, applicable law or otherwise,
      all such rights and remedies being cumulative, not exclusive and enforceable
      alternatively, successively and concurrently, Payee may, at its option, declare
      any or all of Maker’s obligations, liabilities, and indebtedness owing to Payee
      under the Loan Agreement and the other Financing Agreements (the “Obligations”),
      including, without limitation, all amounts owing under this Note, to be due
      and
      payable, whereupon the then unpaid balance hereof, together with all interest
      accrued thereon, shall forthwith become due and payable, together with interest
      accruing thereafter at the then applicable Interest Rate stated above until
      the
      indebtedness evidenced by this Note is paid in full, plus the costs and expenses
      of collection hereof, including, but not limited to, attorneys' fees and legal
      expenses.

    


    Maker
      (i) waives diligence, demand,
      presentment, protest, and notice of any kind, (ii) agrees that it will not
      be
      necessary for Payee to first institute suit in order to
      enforce  payment of this Note, and (iii) consents to any one or more
      extensions or postponements of time of payment, release, surrender, or
      substitution of collateral security, or forbearance or other indulgence, without
      notice or consent.  The pleading of any statute of limitations as a
      defense to any demand against Maker is expressly hereby waived by
      Maker.  Upon any Event of Default or termination or nonrenewal of the
      Loan Agreement, Payee shall have the right, but not the obligation to setoff
      against this Note all money owed by Payee to Maker.

    


    Payee
      shall not be required to resort
      to any Collateral for payment, but may proceed against Maker and any guarantors
      or endorsers hereof in such order and manner as Payee may
      choose.  None of the rights of Payee shall be waived or diminished by
      any failure or delay in the exercise thereof.

    


    The
      validity, interpretation, and
      enforcement of this Note and the other Financing Agreements and any dispute
      arising in connection herewith or therewith shall be governed by the internal
      laws of the State of Maryland (without giving effect to principles of conflicts
      of law).

    


    MAKER
      IRREVOCABLY CONSENTS AND SUBMITS
      TO THE NONEXCLUSIVE JURISDICTION OF THE STATE OF MARYLAND AND THE UNITED STATES
      DISTRICT COURT FOR THE DISTRICT OF MARYLAND AND WAIVES ANY OBJECTION BASED
      ON
      VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED
      THEREIN ARISING UNDER THIS NOTE OR ANY OF THE OTHER FINANCING AGREEMENTS OR
      IN
      ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF MAKER AND
      PAYEE IN RESPECT OF THIS NOTE OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
      TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
      HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE, AND
      AGREES THAT ANY DISPUTE ARISING OUT OF THE RELATIONSHIP

     

     

     

    
      
        
        

      

      
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    BETWEEN
      MAKER AND PAYEE OR THE CONDUCT OF SUCH PERSONS IN CONNECTION WITH THIS NOTE
      OR
      OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE (EXCEPT THAT PAYEE
      SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST MAKER OR ITS
      PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THAT PAYEE DEEMS NECESSARY
      OR
      APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE ITS
      RIGHTS AGAINST MAKER OR ITS PROPERTY).

    


    Maker
      hereby waives personal service of
      any and all process upon it and consents that all such service of process may
      be
      made by certified mail (return receipt requested) directed to it and service
      so
      made shall be deemed to be completed five (5) days after the same shall have
      been so deposited in the U.S. mails, or, at Payee's option, by service upon
      Maker in any other manner provided under the rules of any court of competent
      jurisdiction.  Within thirty (30) days after such service, Maker shall
      appear in answer to such process, failing which Maker shall be deemed in default
      and judgment may be entered by Payee against Maker for the amount of the claim
      and other relief requested.

    


    MAKER
      HEREBY WAIVES ANY RIGHT TO TRIAL
      BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING UNDER THIS
      NOTE
      OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS AMONG
      MAKER AND PAYEE IN RESPECT OF THIS NOTE OR THE OTHER FINANCING AGREEMENTS OR
      THE
      TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
      HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR
      OTHERWISE.  MAKER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
      ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
      JURY.

    


    The
      execution and delivery of this Note
      has been authorized by the Board of Directors and by any necessary vote or
      consent of the stockholders of Maker.  Maker hereby authorizes Payee
      to complete this Note in any particulars according to the terms of the loan
      evidenced hereby.

    


    This
      Note shall be binding upon the
      successors and assigns of Maker and shall inure to the benefit of Payee and
      its
      successors, endorsees, and assigns.  Whenever used herein, the term
“Maker” shall be deemed to include its successors and assigns and the term
“Payee” shall be deemed to include its successors, endorsees, and
      assigns.  If any term or provision of this Note shall be held invalid,
      illegal, or unenforceable, the validity of all other terms and provisions hereof
      shall in no way be affected thereby.  This Note evidences a loan made
      for business or commercial purposes.

    


    UNDER
      OREGON LAW, MOST AGREEMENTS,
      PROMISES AND COMMITMENTS MADE BY PAYEE CONCERNING LOANS AND OTHER CREDIT
      EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
      SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND
      BE SIGNED BY PAYEE TO BE ENFORCEABLE.

     

     

    
      
        
        

      

      
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    PRIOR
      TO SIGNING THIS NOTE, MAKER READ
      AND UNDERSTOOD ALL OF THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE
      INTERST RATE PROVISIONS.  MAKER AGREES TO THE TERMS OF THE
      NOTE.

    


    MAKER
      ACKNOWLEDGES RECEIPT OF A
      COMPLETED COPY OF THIS PROMISSORY NOTE.

    


    {Signatures
      on next page.}

     

     

     

     

     

    


    
      
        
          
          

        

        
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    WITNESS,
      the due execution of this Credit Line Note, intending this to be a sealed
      instrument and a specialty, the date and year first above written.

    


                    NEW
      WORLD BRANDS,
      INC.

                    a
      Delaware
      corporation

    


    


                    By:
      /s/  M.
      David Kamrat


                    Name:
      M. David
      Kamrat

                    Title:
      CEO

    


     

     

     

     

     

     

     

     

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