Exhibit 10.2

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO 1847 ASIEN INC., THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS
SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

1847 ASIEN INC.

 

6% AMORTIZING PROMISSORY NOTE

 

U.S. $1,037,500 July 29, 2020

 

FOR VALUE RECEIVED, 1847 Asien Inc., a Delaware corporation (“Maker”) hereby
promises to pay to Joerg Christian Wilhelmsen and Susan Kay Wilhelmsen, as
Trustees of the Wilhelmsen Family Trust, U/D/T dated May 1, 1992 (the “Holder”)
the principal sum of One Million, Thirty-Seven Thousand Five Hundred Dollars
($1,037,500) (the “Principal”) in lawful money of the United States of America,
together with accrued and unpaid interest thereon, each due and payable on the
date and in the manner set forth below.

 

This Note is issued pursuant to the terms of that certain Securities Purchase
Agreement, dated July 29, 2020, as amended (the “Purchase Agreement”), between
Maker and the Holder, pursuant to which Maker is purchasing from Holder 415,000
shares of common shares of 1847 Holdings LLC (“Holdings”) that, in the
aggregate, have a value as mutually agreed by the parties that is equal to Eight
Hundred Thirty Thousand Dollars ($830,000), which are all of the common shares
of Holdings that are held by the Holder. Capitalized terms used herein but not
defined herein shall have the meaning ascribed to them in the Purchase
Agreement.

 

The following is a statement of the rights of the Holder and the terms and
conditions to which this Note is subject, and to which the Holder, by acceptance
of this Note, agrees:

 

1. Principal Repayment. One-half (50%) of the outstanding principal amount of
this Note ($518,750) (the “Amortized Principal”) and all accrued interest
thereon shall be amortized on a two-year straight-line basis and payable
quarterly in accordance with the amortization schedule set forth on Exhibit A to
this Note (the “Amortization Schedule”). The second-half (50%) of the
outstanding principal amount of this Note ($518,750) (the “Unamortized
Principal”) with all accrued, but unpaid interest thereon shall be paid on the
Second Anniversary of the date of this Note (the “Maturity Date”) along with any
other unpaid principal or accrued interest thereon. All payments of interest and
principal shall be in lawful money of the United States of America.

 

 

 

2. Interest. Interest (the “Interest”) shall accrue on the unpaid Principal from
the date hereof until such Principal is repaid in full at the rate of six
percent (6%) per annum. Interest on the Amortized Principal shall be paid in
accordance with the Amortization Schedule with all unpaid Interest on the
Amortized Principal, if any, being paid on the Maturity Date or the date of the
redemption of this Note and Interest on the Unamortized Principal shall be paid
on the Maturity Date or the date of the redemption of this Note. All
computations of the Interest rate hereunder shall be made on the basis of a
360-day year of twelve 30-day months. In the event that any Interest rate
provided for herein shall be determined to be unlawful, such Interest rate shall
be computed at the highest rate permitted by applicable law. Any payment by
Maker of any Interest amount in excess of that permitted by law shall be
considered a mistake, with the excess being applied to the Principal of this
Note without prepayment premium or penalty.

 

3. Redemption. Maker will have the right to redeem all or any portion of the
Note at any time prior to the Maturity Date without premium or penalty of any
kind. The redemption price will be payable in cash and is equal to the then
outstanding principal amount of this Note plus accrued but unpaid interest
thereon.

 

4. Events of Default. In the event that any of the following (each, an “Event of
Default”) shall occur:

 

(a) Maker shall default in the payment of the Principal or accrued Interest as
and when the same shall become due and payable, whether by acceleration or
otherwise; or

 

(b) Maker shall default in any material manner in the observance or performance
of any covenants or agreements set forth in the Purchase Agreement, this Note or
any other agreement entered into in connection with the transactions
contemplated by the Purchase Agreement (collectively, the “Transaction
Documents”); or

 

(c) Maker materially breaches any representation or warranty contained in the
Transaction Documents; or

 

(d) Maker shall: (i) admit in writing its inability to pay its debts as they
become due; (ii) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for Maker or any of its
property, or make a general assignment for the benefit of creditors; (iii) in
the absence of such application, consent or acquiesce in, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for Maker or for any part of its property; (iv) permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of Maker, and, if such case or
proceeding is not commenced by Maker or converted to a voluntary case, such case
or proceeding shall be consented to or acquiesced in by Maker or shall result in
the entry of an order for relief; (v) grant collateral to secure indebtedness in
preference to the Junior Indebtedness without the approval of Holder, which such
approval shall not be unreasonably withheld;

 

then, and so long as such Event of Default is continuing for a period of two (2)
business days in the case of non-payment under Section 4(a), or for a period of
thirty (30) calendar days in the case of events under Sections 4(b) and 4(c)
(and the event which would constitute such Event of Default, if curable, has not
been cured), by written notice to Maker from the Holder, all obligations of
Maker under this Note shall be immediately due and payable without presentment,
demand, protest or any other action nor obligation of the Holder of any kind,
all of which are hereby expressly waived, and Holder may exercise any other
remedies the Holder may have at law or in equity. If an Event of Default
specified in Section 4(d) above occurs, the Principal of, and accrued Interest
on, the Note shall automatically, and without any declaration or other action on
the part of any Holder, become immediately due and payable.

 

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5.Subordination.

 

(a) All claims of the Holder to principal, interest and any other amounts at any
time owed under this Note (collectively, “Junior Indebtedness”) is hereby
expressly subordinated in right of payment, as herein set forth, to the prior
payment in full of all Senior Indebtedness (as defined below). No payment under
Junior Indebtedness shall be made by the Maker, nor shall the Holder exercise
any remedies under the Junior Indebtedness (including taking any legal action
(whether judicial or otherwise) to collect the Junior Indebtedness), if, at the
time of such payment, exercise or immediately after giving effect thereto, (i)
there shall exist any “default” or “event of default” under any agreements
governing any of the Senior Indebtedness or (ii) the maturity of any of the
Senior Indebtedness has been accelerated and such acceleration has not been
waived or such Senior Indebtedness has not been paid in full; provided, however,
that (x) in the event that the holder of any Senior Indebtedness accelerates
such Senior Indebtedness, then the Holder may accelerate the indebtedness
evidenced by this Note, and (y) if the Maker is permitted under the terms of the
Senior Indebtedness to pay an amount due and owing under this Note and fails to
make such payment, then so long as the terms of the Senior Indebtedness do not
prohibit such action, the Holder may exercise its rights to be paid such amount,
but only such amount (and Holder shall not be permitted to accelerate
hereunder).

 

(b) Upon any payment or distribution of assets of the Maker of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or total or partial liquidation or reorganization of
the Maker, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Senior Indebtedness of the Maker shall
first be paid in full, or payment thereof provided for in money, before any
payment is made under Junior Indebtedness; and upon any such dissolution or
winding up or liquidation or reorganization, any distribution of assets of the
Maker of any kind or character, whether in cash, property or securities, to
which the Holder as holder of the Junior Indebtedness would be entitled except
for the provisions hereof, shall be paid by the Maker or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, or by the Holder if received by Holder, directly to the
holder of the Senior Indebtedness, or its representatives, to the extent
necessary to pay all such Senior Indebtedness in full, in money, after giving
effect to any concurrent prepayment or distribution to or for the benefit of the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holder with respect to the Junior Indebtedness.

 

(c) If the holders of the Senior Indebtedness in good faith believe Holder may
fail to timely file a proof of claim in any such proceeding, the holder(s) of
the Senior Indebtedness may do so for Holder.

 

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(d) In the event that any payment or distribution of assets of the Maker of any
kind or character, whether in cash, property or securities, prohibited by the
foregoing shall be received by the Holder before all the Senior Indebtedness is
paid in full, or provisions made for such payment, in accordance with its terms,
such payment or distribution shall be held for the benefit of, and shall be paid
over or delivered to, the holders of the Senior Indebtedness or their
representative or representatives, as their respective interests may appear, for
application to the payment of all the Senior Indebtedness remaining unpaid to
the extent necessary to pay all such Senior Indebtedness in full, in money, in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.

 

(e) The provisions hereof are solely for the purpose of defining the relative
rights of the holders of the Senior Indebtedness on the one hand and the Holder
as holder of the Junior Indebtedness on the other hand, and nothing herein shall
impair, as between the Maker and the Holder, the obligations of the Maker under
the Junior Indebtedness, which are unconditional and absolute. With this in
mind, notwithstanding the other provisions of this Section 4, if and so long as
all documents governing the Senior Indebtedness permit one of the actions
restricted by this Section 4, the restriction shall be waived and the restricted
action permitted hereunder.

 

(f) No right of any present or future holder of any Senior Indebtedness to
enforce the subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Maker or
any act or failure to act, in good faith, by any such holder of the Senior
Indebtedness, or any noncompliance by the Maker with the terms, provisions and
covenants hereof, regardless of any knowledge thereof any holder of the Senior
Indebtedness may have or be otherwise charged with. Without in any way limiting
the generality of the foregoing, the holders of the Senior Indebtedness may, at
any time and from time to time, without the consent of or notice to the Holder,
without incurring responsibility to the Holder and without impairing or
releasing the subordination provided in this Note or the obligations hereunder
of the Holder to the holders of the Senior Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or create, renew or alter, the Senior Indebtedness, or
otherwise amend or supplement in any manner the Senior Indebtedness or any
instrument evidencing the same or any agreement under which the Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing the Senior Indebtedness;
(iii) release any person liable or contingently liable in any manner for the
payment or collection of the Senior Indebtedness; and/or (iv) exercise or
refrain from exercising any rights against the Maker or any other person.

 

(g) Each holder of any Senior Indebtedness, whether such Senior Indebtedness was
created or acquired before or after the issuance of this Note, shall be entitled
to rely on the subordination provisions set forth in this Note.

 

(h) Notwithstanding the provisions of this Section 4, the Holder shall not be
charged with knowledge of the existence of facts which would prohibit the making
of any payments on the Junior Indebtedness unless and until the holder(s) of the
Senior Indebtedness or their representatives send written notice to Holder of
same.

 

(i) Subject to the payment in full of all the Senior Indebtedness, Holder as
holder of the Junior Indebtedness shall be subrogated to the rights of the
holders of the Senior Indebtedness to receive payments or distributions of
assets of the Maker applicable to the Senior Indebtedness until the Senior
Indebtedness shall be paid in full.

 

(j) The Holder shall confirm (in writing) the above subordination provisions if
requested by any holder of the Senior Indebtedness, and shall execute and
deliver such additional subordination agreements, consistent with the foregoing
as any holder of Senior Indebtedness may require.

 

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(k) For purposes hereof, “Senior Indebtedness” means all indebtedness of the
Maker, whether outstanding on the date of the execution of this Note or
thereafter created, to banks, insurance companies and other financial
institutions or funds, unless in the instrument creating or evidencing such
indebtedness it is provided that such indebtedness is not senior in right of
payment to this Note. Senior Indebtedness shall also include indebtedness for
taxes owed to federal or state agencies and other indebtedness of the Maker that
by operation of law has a right that is senior to the Junior Indebtedness.

 

5. Holder Not Deemed a Stockholder. No Holder, as such, of this Note shall be
entitled to vote or receive dividends or be deemed the holder of shares of Maker
for any purpose, nor shall anything contained in this Note be construed to
confer upon the Holder hereof, as such, any of the rights at law of a
stockholder of Maker.

 

6. Mutilated, Destroyed, Lost or Stolen Note. If this Note shall become
mutilated or defaced, or be destroyed, lost or stolen, Maker shall execute and
deliver a new note of like principal amount in exchange and substitution for the
mutilated or defaced Note, or in lieu of and in substitution for the destroyed,
lost or stolen Note certificate. In the case of a mutilated or defaced Note
certificate, the Holder shall surrender such Note certificate to Maker. In the
case of any destroyed, lost or stolen Note certificate, the Holder shall furnish
to Maker: (i) evidence to its satisfaction of the destruction, loss or theft of
such Note certificate and (ii) such security or indemnity (which shall not
include the posting of any bond) as may be reasonably required by Maker to hold
Maker harmless.

 

7. Waiver of Demand, Presentment, etc. Maker hereby expressly waives demand and
presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, notice of acceleration or intent to accelerate, bringing of
suit and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and
to be owing hereunder, regardless of and without any notice, diligence, act or
omission as or with respect to the collection of any amount called for
hereunder. Maker agrees that, in the event of an Event of Default, to reimburse
the Holder for all reasonable costs and expenses (including reasonable legal
fees of one counsel) incurred in connection with the enforcement and collection
of this Note.

 

8. Payment. All payments with respect to this Note shall be made in lawful money
of the United States of America, at the address of the Holder as of the date
hereof or as designated in writing by the Holder from time to time. The receipt
by the Holder of immediately available funds shall constitute a payment of
Principal and Interest hereunder and shall satisfy and discharge the liability
for Principal and Interest on this Note to the extent of the sum represented by
such payment. Payment shall be credited first to the accrued Interest then due
and payable and the remainder applied to Principal.

 

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9. Assignment. The rights and obligations of Maker and the Holder of this Note
shall be binding upon, and inure to the benefit of, the successors and permitted
assigns of the parties hereto. To complete an assignment or transfer this Note,
the Holder shall deliver a completed and executed Form of Assignment attached
hereto as Exhibit B and surrender and deliver this Note, duly endorsed, to
Maker’s office or such other address which Maker shall designate, upon receipt
of which a new Note, in substantially the form of this Note (any such new Note,
a “New Note”), evidencing the portion of this Note so transferred shall be
issued to the transferee and a New Note evidencing the remaining portion of this
Note not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Note by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations in respect of
the New Note that the Holder has in respect of this Note. Interest and principal
are payable only to the registered Holder of this Note set forth on the books
and records of Maker.

 

10. Waiver and Amendment. Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of Maker
and the Holder.

 

11. Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
given in accordance with the provisions of the Purchase Agreement.

 

12. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Note shall be governed by and construed
and enforced solely and exclusively in accordance with the laws of the state of
California without regard to any statutory or common-law provision pertaining to
conflicts of laws. The Parties agree that state and federal courts of competent
jurisdiction in the State of California shall have concurrent jurisdiction for
purposes of entering temporary, preliminary and permanent injunctive relief with
regard to any action arising out of any breach or alleged breach of the Note.
The Parties agree to submit to the personal jurisdiction of such courts and any
other applicable court within the state of California. The Parties further agree
that the mailing of any process shall constitute valid and lawful process
against each Party hereto. The Parties waive any claim that that any of the
foregoing courts is an inconvenient forum.

 

13. Severability. If one or more provisions of this Note are held to be
unenforceable under applicable law, such provisions shall be excluded from this
Note, and the balance of this Note shall be interpreted as if such provisions
were so excluded and shall be enforceable in accordance with its terms.

 

14. Headings. Section headings in this Note are for convenience only and shall
not be used in the construction of this Note.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Maker has caused this Note to be issued as of the date first
above written.

 

  1847 Asien Inc.       By: /s/ Robert D. Patterson   Name:   Robert Patterson  
Title: Chief Executive Officer

 

 

Exhibit A

 

Amortization Schedule

 

Quarterly payments begin on October 1, 2020 and shall be made on each January 1,
April 1, July 1, and October 1 thereafter, and the balance of unpaid principal
and accrued, but unpaid interest thereon, being fully paid on the Maturity Date.

 

Quarterly Payment No.  Payment
Amount   Principal   Interest   Remaining
Amortized
Principal
Balance
(50% of Total
Principal)  1  $69,296.71   $61,515.46   $7,781.25   $457,234.54  2 
$69,296.71   $62,438.19   $6,858.52   $394,796.35  3  $69,296.71   $63,374.76  
$5,921.95   $331,421.59  4  $69,296.71   $64,325.39   $4,971.32   $267,096.20 
5  $69,296.71   $65,290.27   $4,006.44   $201,805.93  6  $69,296.71  
$66,269.62   $3,027.09   $135,536.31  7  $69,296.71   $67,263.67   $2,033.04  
$68,272.64  8  $69,296.73   $68,272.64   $1,024.09   $0.00  TOTALS: 
$554,373.70   $518,750.00   $35,623.70      

 

 

 

Exhibit B

 

FORM of assignment

 

TO: 1847 Asien Inc.

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
___________________ (name), __________________________________________
(address), US$____________ of 6% Amortizing Promissory Note (“Note”) of 1847
Asien Inc. (the “Company”), including any and all accrued and unpaid interest
owing thereon, registered in the name of the undersigned on the records of 1847
Asien Inc. represented by the within certificate, and irrevocably appoints
___________________ the attorney of the undersigned to transfer the said
securities on the books or register with full power of substitution.

 

DATED this ________ day of, __________________, 20 ____.

 

    (Signature of Registered Note Holder)           (Print name of Registered
Note Holder)  

 

Instructions:

 

1.Signature of Holder must be the signature of the person appearing on the face
of the Note.

 

2.If the transfer of Note is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person acting in a
fiduciary or representative capacity, the certificate must be accompanied by
evidence of authority to sign satisfactory to 1847 Asien Inc.