$________ No. ___

 

EASTSIDE DISTILLING, INC.

8% PROMISSORY NOTE

 

December 29, 2017 Portland, Oregon

 

1. General. For value received, and subject to the terms hereof, EASTSIDE
DISTILLING, INC., a Nevada corporation, whose address is 1001 SE Water Avenue,
Suite 390, Portland, OR 97214 (“Borrower”), hereby promises to pay to the order
of ____________________________, whose address is
_______________________________________(“Payee”), the principal amount of
_________________________________ ($______.00) under the terms and conditions
set forth in this Note. The loan represented by this Note (the “Loan”) was
incurred in connection with the purchase from MGP Ingredients, Inc. by Borrower
of the whiskey barrels, the purchase price for which was paid by Payee either
directly to the supplier on behalf of Borrower or to Borrower for the exclusive
purpose of purchasing barrels.

 

2. Term; Payments. The principal amount of this Note shall be repaid in full,
together with any and all accrued and unpaid interest on June 30, 2019 or (the
“Maturity Date”).

 

3. Interest; Premium. Interest shall accrue from the date hereof on any unpaid
principal balance of this Note at the rate of eight percent (8%) per annum. All
interest will be paid monthly in arrears and shall be paid on the last business
day of each month.

 

4. Possible Early Payment Due; Application of Note Proceeds to Future Financing.
Notwithstanding the provisions of paragraphs 2 and 3 hereof, in the event
Borrower closes a private or public offering of the its equity or debt
securities in which the gross amount raised in such financing is at least $2.0
million (a “Future Financing”), all amount due under this Note shall become due
and payable within five (5) business days of the final closing of such Future
Financing. In lieu of receiving the cash repayment of amounts due under this
Note in connection with a Future Financing, at the option of Payee, the
principal amount due and payable may be used to purchase the securities offered
in the Future Financing.

 

5. Place of Payment. Any and all amounts payable by Borrower to Payee hereunder
shall be made in immediately available funds and shall be paid at the address
for such Payee as set forth in the Agreement, or at such other address of which
Payee shall give written notice to Borrower.

 

6. Events of Default. The occurrence of any one or more of the following events
shall constitute an event of default hereunder (“Event of Default”):

 

(a) Failure of Borrower to pay the principal of or interest on this Note, when
and as the same shall become due and payable and such failure continues
unremedied for fifteen (15) days;

 

(b) The material default, breach or violation of Borrower in the performance or
observance of any of the other covenants, agreements or conditions of Borrower
contained in this Note and such material default, breach or violation continues
unremedied for a period of fifteen (15) days following written notice from Payee
to Borrower; or

 

(c) Any representation or warranty of the Borrower made herein or in any
agreement, statement or certificate given in writing pursuant hereto or in
connection herewith, shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Payee with respect to this Note or
its security interest in the whiskey barrels.

 

 

 

 

6. Remedies. Upon the occurrence of an Event of Default hereunder, in addition
to all other rights, remedies and powers of Payee under this Note or otherwise
available at law or in equity, Payee may, at its option, without notice, declare
the outstanding principal balance and interest immediately due and payable in
full without further notice to or demand on Borrower of any kind, including
without limitation, presentment, demand or notice of demand, protest or notice
of protest, notice of nonpayment or dishonor and all other notices or
communications in connection with the delivery, acceptance, performance, default
or enforcement of payment of this Note, all of which are hereby waived by
Borrower. Borrower also hereby waives all notice or right of approval of any
extensions, renewals, modifications or forbearances which may be allowed.

 

7. Notices. Any notices or communications required or permitted to be given by
this Note must be (i) given in writing and (ii) personally delivered or mailed,
by prepaid, certified mail or overnight courier, or transmitted by facsimile or
electronic mail transmission (including PDF), to the party to whom such notice
or communication is directed, to the mailing address or regularly-monitored
electronic mail address of such party as follows:

 

  If to Borrower:           Eastside Distilling, Inc.     1001 SE Water Avenue,
Suite 390     Portland, OR 97214     Attn: Chief Financial Officer    
Telephone: (971) 888-4264     Fax: (866) 554-0271     Email:
sshum@eastsidedistilling.com           If to Payee:           The Grover T.
Wickersham, P.C. Employee Profit Sharing Plan     430 Cambridge Avenue, Suite
100     Palo Alto, CA 94306     Attn: Ann McCoid     Telephone: (650) 323-6400  
  Fax: (650) 323-1108     Email: ann@wickersham.com  

 

Any such notice or communication shall be deemed to have been given on (i) the
day such notice or communication is personally delivered, (ii) three (3) days
after such notice or communication is mailed by prepaid certified or registered
mail, (iii) one (1) working day after such notice or communication is sent by
overnight courier, or (iv) the day such notice or communication is faxed or sent
electronically, provided that the sender has received a confirmation of such fax
or electronic transmission. A party may, for purposes of this Note, change its
address, fax number, email address or the person to whom a notice or other
communication is marked to the attention of, by giving notice of such change to
the other party pursuant to this Section 7.

 

8. Interest Savings Clause. If any interest payment due hereunder is determined
to be in excess of the then legal maximum rate, then that portion of each
interest payment representing an amount in excess of the then legal maximum rate
shall instead be deemed a payment of principal and applied against the principal
of the obligations evidenced by this Note.

 

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9. Amendments and Waivers. This Note may be amended, modified or supplemented by
the parties hereto, provided that any such amendment, modification or supplement
shall be in writing and signed by both Borrower and Payee. No waiver with
respect to this Note shall be enforceable against Payee unless in writing and
signed by Payee. Except as otherwise expressly provided herein, no failure to
exercise, delay in exercising, or single or partial exercise of any right, power
or remedy by Payee, and no course of dealing between the parties, shall
constitute a waiver of, or shall preclude any other or further exercise of the
same or any other right, power or remedy.

 

10. Successors and Assigns. This Note shall be binding upon the parties and
their respective successors and assigns. Borrower shall not in any manner assign
any of its rights or obligations under this Note without the express prior
written consent of the holder of this Note.

 

11. Severability. If any provision of this Note is construed to be invalid,
illegal or unenforceable, then the remaining provisions hereof shall not be
affected thereby and shall be enforceable without regard thereto.

 

12. Section Headings. The section and subsections headings in this Note are for
convenience of reference only, do not constitute a part of this Note and shall
not affect its interpretation.

 

13. Controlling Law. This Note is made under, and shall be construed and
enforced in accordance with, the laws of the State of Oregon applicable to
agreements made and to be performed solely therein, without giving effect to
principles of conflicts of law. EACH OF THE PARTIES (A) IRREVOCABLY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF OREGON, IN ANY AND ALL ACTIONS
BETWEEN OR AMONG ANY OF THE PARTIES, WHETHER ARISING HEREUNDER OR OTHERWISE, (B)
IRREVOCABLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUCH ACTION, AND (C)
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY FIRST CLASS CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, POSTAGE PREPAID, TO THE ADDRESS AT WHICH SUCH PARTY IS TO
RECEIVE NOTICE PURSUANT TO THE PROVISIONS OF THE AGREEMENT.

 

14. Reimbursement of Expenses. Borrower agrees to reimburse Payee for its
out-of-pocket expenses, including the fees and expenses of its counsel, in
connection with the enforcement of this Note.

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, Borrower has
caused this Note to be executed by its duly authorized officer as of the day and
year first above written.

 

  BORROWER:         EASTSIDE DISTILLING, INC.               By:       Steven M.
Shum     Chief Financial Officer

 

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