PROMISSORY NOTE

$3,750,000.00_____________, 2020 

 

FOR VALUE RECEIVED, Acquired Sales Corp., a Nevada corporation ("AQSP"), and
Lifted Liquids, Inc., an Illinois corporation and a wholly-owned subsidiary of
AQSP ("Merger Sub") (AQSP and Merger Sub being referred to individually as a
"Payor" and collectively as "Payors") HEREBY JOINTLY AND SEVERALLY PROMISE TO
PAY to the order of Nicholas S. Warrender, a Wisconsin resident with his
principal residence at 328 55th Street B, Kenosha, WI  53140 (“Payee”), the
principal sum of THREE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS AND 00/100
($3,750,000.00), payable as set forth below.  Interest on this Promissory Note
shall be calculated on the basis of actual number of days elapsed and a 365-day
year and shall be at a rate per annum equal to two percent (2.00%) (the
“Interest Rate”). This Promissory Note is being issued to memorialize that
certain Promissory Note constituting the Note Consideration in accordance with
that certain Agreement and Plan of Merger dated January 7, 2020 by and among
Payors, Gerard M. Jacobs, William C. Jacobs, Warrender Enterprise Inc. d/b/a
Lifted Liquids, and Payee (the “Merger Agreement”). Any capitalized term used
but not defined herein shall have the meaning ascribed to such term as set forth
in the Merger Agreement.  

 

1.Principal and Interest Payment Date. The principal and all accrued interest on
this Promissory Note shall be due and payable in full upon the date (the
"Payment Date") which is the earlier of (a) the date which is thirty (30) days
after the last day (the "Aggregate EBITDA Calculation Date") of the calendar
quarter during which the aggregate earnings before interest, taxes, depreciation
and amortization ("EBITDA") of Merger Sub during the period between the Closing
Date and the Aggregate EBITDA Calculation Date, as certified by AQSP's firm of
independent certified public accountants, exceeds $7,500,000, or (b) the date
which is the fifth anniversary of the Closing Date. 

 

2. Voluntary Prepayments. This Promissory Note may, at the option of Payors, be
prepaid in whole or in part, at any time and from time to time, without premium
or penalty. 

3. Mandatory Prepayments. Within five (5) business days following the closing of
any equity or debt capital raise by any Payor following the date of the Merger
Agreement, excluding only the capital raise for the Wisconsin Acquisitions
referred to in Section 5.23(a) of the Merger Agreement, Payors shall be
obligated to allocate and pay over at least 50% of the net proceeds of such
capital raise toward a prepayment of the principal and accrued interest on this
Promissory Note. 

 

4.Maximum Lawful Rate.  If any payment of interest hereunder in excess of the
amount permitted by applicable law is received by Payee, the amount of such
excess payment shall automatically be applied to reduce the principal amount
outstanding hereunder in the order of maturity. 

5.Place of Payment.  Payments of principal and interest are payable in lawful
money of the United States of America to Payee at Payee’s address listed above
or at such other address as Payee may direct in writing to Payors.  

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6.Security.  Payors hereby covenant and agree that for so long as any
obligations shall remain outstanding under this Promissory Note: 

 

(a) This Promissory Note shall be secured by a first lien security interest in
all of the assets of Payors; and 

 

(b) This Promissory Note shall be secured by a pledge of: (i) all of the capital
stock of Merger Sub; (ii) all of the common stock of Bendistillery Inc., Bend
Spirits, Inc., and Ablis Holding Company that is owned by Payors; and (iii) all
of the capital stock of any other entity owned by any Payor or any of its
subsidiaries, pursuant to a Collateral Stock Pledge Agreement of even date
herewith, between Payee, as Secured Party, and Payors, as Pledgors. 

 

7.Notice of Default.  Payors shall promptly notify Payee of any condition or
event that constitutes an Event of Default as defined below. 

 

8.Events of Default. Each of the following occurrences shall constitute an
“Event of Default” under this Promissory Note: 

 

(a)Payors fail to pay when due and payable any amount of principal or interest
under this Promissory Note, and such failure to pay is not cured within ten (10)
days; 

 

(b)Payors fail to perform or breach (other than a failure or breach which
constitutes an Event of Default under another clause of this Section 8) in any
material respect any of their obligations or the terms or provisions hereunder,
and fail to cure such breach or failure within thirty (30) days following their
receipt of notice from Payee describing such failure or breach;  

 

(c)Any Payor makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become due; or an
order, judgment or decree is entered adjudicating any Payor bankrupt or
insolvent; or any order for relief with respect to any Payor is entered under
the Federal Bankruptcy Code; or any Payor petitions or applies to any tribunal
for the appointment of a custodian, trustee, receiver or liquidator of such
Payor or of any substantial part of the assets of such Payor, or commences any
proceeding relating to such Payor under any bankruptcy reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against any Payor and either (i) such Payor by any act
indicates its approval thereof, consent thereto or acquiescence therein, or (ii)
such petition, application or proceeding is not dismissed within 60 days. 

 

9.Acceleration. 

 

(a)If an Event of Default of the type described in Section 8(c) has occurred,
the principal amount of this Promissory Note (together with all accrued interest
hereon and all other amounts due and payable with respect hereto) shall become
immediately due and payable without any action on the part of Payee, and Payors
shall immediately pay to Payee all amounts due and payable with respect to this
Promissory Note. 

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(b)If any other Event of Default has occurred and is continuing, Payee may
declare the outstanding principal amount of this Promissory Note (together with
all accrued interest thereon and all other amounts due and payable with respect
thereto) to be immediately due and payable and may demand immediate payment of
the outstanding principal amount of this Promissory Note (together with accrued
interest thereon and all such other amounts then due and payable). 

 

(c)Payee shall also have any other rights which Payee may have pursuant to
applicable law. 

 

(d)Payors hereby waive diligence, presentment, protest and demand and notice of
protest and demand, dishonor and nonpayment of this Promissory Note and all
other notices except as expressly provided herein, and expressly agree that this
Promissory Note, or any payment hereunder, may be extended from time to time
without in any way affecting the liability of Payors hereunder. 

 

10.No Waiver.  No delay or omission on the part of Payee in exercising any right
hereunder shall operate as a waiver of any right under this Promissory Note. 

 

11.Amendment; No Assignment.  No amendment, modification, termination or waiver
of any provision of this Promissory Note shall be effective unless the same
shall be in writing and signed by Payors and Payee. Payee may not assign this
Promissory Note without the prior written consent of Payors. 

 

12.Governing Law.  THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO ITS
CONFLICT OF LAW PRINCIPLES. 

 

13.Costs of Collection.  If (a) the Promissory Note is placed in the hands of an
attorney for collection or enforcement or is collected or enforced through any
legal proceeding; (b) an attorney is retained to represent Payee in any
bankruptcy, reorganization, receivership, or other proceedings affecting
creditors’ rights and involving a claim under the Promissory Note; (c) an
attorney is retained to represent Payee in any other proceedings whatsoever in
connection with the Promissory Note as a result of the action or inaction of
Payors, then Payors shall pay to Payee all reasonable attorneys’ fees, costs and
expenses incurred in connection therewith, in addition to all other amounts due
hereunder.  

 

14.WAIVER OF JURY TRIAL.  EACH OF PAYORS AND PAYEE WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED IN
CONNECTION HEREWITH OR HEREAFTER AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  ANY DISPUTES ARISING UNDER
OR RELATING TO THIS PROMISSORY NOTE WILL BE LITIGATED ONLY IN THE STATE COURTS
LOCATED IN LAKE COUNTY, ILLINOIS 

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AND THE PARTIES HEREBY CONSENT TO THE PERSONAL JURISDICTION AND EXCLUSIVE VENUE
OF THESE COURTS AND AGREE THAT ANY SUCH ACTION WILL BE TRIED BEFORE THE COURT
AND NOT BEFORE A JURY.

 

IN WITNESS WHEREOF, this Promissory Note is hereby executed and delivered as of
the ___ day of ____________, 2020. 

 

ACQUIRED SALES CORP.LIFTED LIQUIDS, INC. 

 

 

 

By____________________________By__________________________ 

         Gerard M. Jacobs, CEOGerard M. Jacobs, on behalf 

of the Board of Directors 

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