Exhibit
10.1





 


 


		 

                                                                                                                                       

                                                                                                                                      U.S.
        Small Business Administration

         

        Note

         

         



 


	SBA
    Loan #	34711771-08
	 	 
	SBA
    Loan Name	Eastside
    Distilling, Inc.
	 	 
	Date	April
    15, 2020
	 	 
	Loan
    Amount	$
    1,044,500.00
	 	 
	Interest
    Rate	One
    percent (1.0%) fixed rate note
	 	 
	Borrower	Eastside
    Distilling, Inc.
	 	 
	Operating
    Company	Eastside
    Distilling, Inc.
	 	 
	Lender	Live
    Oak Banking Company


 


	1.	PROMISE
    TO PAY:


 


In
return for the Loan, Borrower promises to pay to the order of Lender the amount of $ 1,044,500.00 Dollars, interest on
the unpaid principal balance, and all other amounts required by this Note.


 


	2.	DEFINITIONS:


 


“Loan”
means the loan evidenced by this Note.


 


“Loan
Documents” means the documents related to this loan signed by Borrower, any guarantor, or anyone who pledges collateral.


 


“SBA”
means the Small Business Administration, an Agency of the United States of America.


 




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	3.	PAYMENT
    TERMS:


 


Borrower
must make all payments at the place Lender designates. The payment terms for this Note are:


 




 


The
note will mature in two (2) years from the date of the Note.


 


The
interest rate on this Note is fixed at one percent (1.0%) per year. This rate is set by the United States Small Business Administration
(“SBA”) as part of the Paycheck Protection Program approved under the Coronavirus Aid, Relief, and Economic Security
Act (CARES Act), section 7(a)(36) of the Small Business Act.


 


Interest
shall accrue from the date of this Note, however all principal and interest payments shall be deferred for six (6) months from
the date of this Note. Borrower must pay principal and interest payments of $58,781.30 every month, beginning seven (7)
months from the month this Note is dated; payments must be made on the fifth (5th) calendar day in the months they
are due.


 


Lender
will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal
current, then to pay any late fees, and will apply any remaining balance to reduce principal.


 


Borrower
may prepay this Note without penalty. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without
notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must: a. Give Lender
written notice; b. Pay all accrued interest; and c. If the prepayment is received less than 21 days from the date Lender received
the notice, pay an amount equal to 21 days interest from the date lender received the notice, less any interest accrued during
the 21 days and paid under b. of this paragraph. If Borrower does not prepay within 30 days from the date Lender received the
notice, Borrower must give Lender a new notice.


 


All
remaining principal and interest is due and payable two (2) years from the date of the Note.


 


Late
Charge: If a payment on this Note is more than 15 days late, Lender may charge Borrower a late fee of up to 4.00% of the unpaid
portion of the regularly scheduled payment.


 





 






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	4.	DEFAULT:


 


Borrower
is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:


 


	 	A.	Fails
    to do anything required by this Note and other Loan Documents;
	 	 	 
	 	B.	Defaults
    on any other loan with Lender;
	 	 	 
	 	C.	Does
    not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;
	 	 	 
	 	D.	Makes,
    or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;
	 	 	 
	 	E.	Defaults
    on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability
    to pay this Note;
	 	 	 
	 	F.	Fails
    to pay any taxes when due;
	 	 	 
	 	G.	Becomes
    the subject of a proceeding under any bankruptcy or insolvency law;
	 	 	 
	 	H.	Has
    a receiver or liquidator appointed for any part of their business or property;
	 	 	 
	 	I.	Makes
    an assignment for the benefit of creditors;
	 	 	 
	 	J.	Has
    any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s
    ability to pay this Note;
	 	 	 
	 	K.	Reorganizes,
    merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written consent; or
	 	 	 
	 	L.	Becomes
    the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay this
    Note.


 


	5.	LENDER’S
    RIGHTS IF THERE IS A DEFAULT:


 


Without
notice or demand and without giving up any of its rights, Lender may:


 


	 	A.	Require
    immediate payment of all amounts owing under this Note;
	 	 	 
	 	B.	Collect
    all amounts owing from any Borrower; or
	 	 	 
	 	C.	File
    suit and obtain judgment.


 


	6.	LENDER’S
    GENERAL POWERS:


 


Without
notice and without Borrower’s consent, Lender may:


 


	 	A.	Incur
    expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document. Among other things,
    the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs,
    and reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower
    or add the expenses to the principal balance;
	 	 	 
	 	B.	Release
    anyone obligated to pay this Note; and
	 	 	 
	 	C.	Take
    any action necessary to collect amounts owing on this Note.


 




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	7.	WHEN
    FEDERAL LAW APPLIES:


 


When
SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may
use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By
using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to
this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA,
or preempt federal law.


 


	8.	SUCCESSORS
    AND ASSIGNS:


 


Under
this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.


 


	9.	GENERAL
    PROVISIONS:


 


	 	A.	All
    individuals and entities signing this Note are jointly and severally liable.
	 	 	 
	 	B.	Borrower
    waives all suretyship defenses.
	 	 	 
	 	C.	Borrower
    must sign all documents necessary at any time to comply with the Loan Documents.
	 	 	 
	 	D.	Lender
    may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo
    enforcing any of its rights without giving up any of them.
	 	 	 
	 	E.	Borrower
    may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.
	 	 	 
	 	F.	If
    any part of this Note is unenforceable, all other parts remain in effect.
	 	 	 
	 	G.	To
    the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand,
    protest, and notice of dishonor.


 




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	10.	STATE-SPECIFIC
    PROVISIONS:


 




 


DELAWARE
(for residents of Delaware)


 


CONFESSION
OF JUDGMENT. IN THE EVENT OF ANY DEFAULT OR EVENT OF DEFAULT UNDER THIS NOTE, INCLUDING WITHOUT LIMITATION, ANY PAYMENT UNDER
THIS NOTE NOT BEING PAID WHEN DUE, WHETHER AT MATURITY BY ACCELERATION OR OTHERWISE, BORROWER HEREBY IRREVOCABLY APPOINTS AND
CONSTITUTES LENDER AS BORROWER’S DULY APPOINTED ATTORNEY-AT-LAW TO APPEAR IN OPEN COURT IN IN ANY COURT OF COMPETENT JURISDICTION,
AND TO CONFESS JUDGMENT PURSUANT TO THE PROVISIONS OF TITLE 10 SECTION 4732 OF THE DELAWARE CODE, AS AMENDED, AGAINST BORROWER
FOR ALL PRINCIPAL AND INTEREST AND ANY OTHER AMOUNTS DUE AND PAYABLE UNDER THIS NOTE, TOGETHER WITH ATTORNEY’S FEES AND
COLLECTION FEES AS PROVIDED IN THIS NOTE (TO THE EXTENT PERMITTED BY LAW). THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST
AND MAY NOT BE REVOKED AND/OR TERMINATED BY BORROWER. THIS POWER OF ATTORNEY SHALL NOT BE REVOKED AND/OR TERMINATED BY VIRTUE
OF THE DEATH, DISABILITY, AND/OR DISSOLUTION OF BORROWER. NO SINGLE EXERCISE OF THE POWER TO CONFESS JUDGMENT SHALL BE DEEMED
TO EXHAUST THE POWER, AND NO JUDGMENT AGAINST BORROWER SHALL BAR SUBSEQUENT ACTION OR JUDGMENT AGAINST SUCH ENTITY AGAINST WHOM
THE JUDGMENT HAS NOT BEEN OBTAINED IN THIS NOTE.


 


GEORGIA
(for residents of Georgia)


 


THE
UNDERSIGNED BORROWER HEREBY WAIVES THE RIGHT TO REQUIRE THE HOLDER OF THIS OBLIGATION TO CONFIRM ANY FORECLOSURE SALE AS A CONDITION
FOR TAKING ACTION TO COLLECT ON THIS NOTE.


 


MARYLAND
(for residents of Maryland)


 


CONFESSION
OF JUDGMENT. THE UNDERSIGNED HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR CLERK OF ANY COURT OF RECORD IN THE UNITED STATES
OR ELSEWHERE TO APPEAR FOR AND, WITH OR WITHOUT DECLARATION FILED, CONFESS JUDGMENT AGAINST THE UNDERSIGNED IN FAVOR OF THE HOLDER,
ASSIGNEE, OR SUCCESSOR OF HOLDER OF THE NOTE, AT ANY TIME, FOR THE FULL OR TOTAL AMOUNT OF THIS NOTE, TOGETHER WITH ALL INDEBTEDNESS
PROVIDED FOR THEREIN, WITH COSTS OF SUIT AND ATTORNEY’S COMMISSION OF TEN (10) PERCENT FOR THE COLLECTION; AND THE UNDERSIGNED
EXPRESSLY RELEASES ALL ERRORS, WAIVES ALL STAY OF EXECUTION, RIGHTS OF INQUISITION, AND EXTENSION UPON ANY LEVY UPON REAL ESTATE
AND ALL EXEMPTION OF PROPERTY FROM LEVY AND SALE UPON ANY EXECUTION HEREON; AND THE UNDERSIGNED EXPRESSLY AGREES TO CONDEMNATION
AND EXPRESSLY RELINQUISHES ALL RIGHTS TO BENEFITS OR EXEMPTIONS UNDER ANY AND ALL EXEMPTION LAWS NOW IN FORCE OR WHICH MAY HEREAFTER
BE ENACTED.


 


MISSOURI
(for residents of Missouri)


 


ORAL
OR UNEXECUTED AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY
WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU [BORROWERS(S)] AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT,
ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF
THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.


 





 






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	10.	STATE-SPECIFIC
    PROVISIONS:


 




 


OHIO
(for residents of Ohio)


 


CONFESSION
OF JUDGMENT. BORROWER HEREBY AUTHORIZES ANY ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF RECORD IN ANY COUNTY IN THE STATE OF OHIO
OR ELSEWHERE WHERE BORROWER HAS A PLACE OF BUSINESS, SIGNED A NOTE, OR CAN BE FOUND, AFTER THE LENDER DECLARES A DEFAULT AND ACCELERATES
THE BALANCES DUE UNDER THIS AGREEMENT, TO WAIVE THE ISSUANCE OF SERVICE OF PROCESS, AND CONFESS JUDGMENT AGAINST BORROWER IN FAVOR
OF LENDER FOR THE AMOUNTS THEN APPEARING DUE, TOGETHER WITH THE COSTS OF SUIT, AND THEREUPON TO RELEASE ALL ERRORS AND WAIVE ALL
RIGHT OF APPEAL AND STAY OF EXECUTION. BORROWER AGREES AND CONSENTS THAT ANY ATTORNEY CONFESSING JUDGMENT ON BEHALF OF BORROWER
HEREUNDER MAY ALSO BE COUNSEL FOR LENDER AND ANY OF ITS AFFILIATES, WAIVES ANY CONFLICT OF INTEREST WHICH MIGHT OTHERWISE ARISE,
AND CONSENTS TO LENDER, OR ITS AGENT, PAYING SUCH CONFESSING ATTORNEY A LEGAL FEE OR ALLOWING SUCH ATTORNEYS’ FEES TO BE
PAID FROM ANY PROCEEDS OF COLLECTION OF AGREEMENT OR COLLATERAL SECURITY THEREFOR.


 


OREGON
(for residents of Oregon)


 


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


 


PENNSYLVANIA
(for residents of Pennsylvania)


 


CONFESSION
OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OF CLERK OF COURT IN THE COMMONWEALTH
OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE, AND WITH OR WITHOUT COMPLAINT
FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE
CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS
OF SUIT, AND AN ATTORNEY’S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION,
BUT IN ANY EVENT, NOT LESS THAN FIVE HUNDRED DOLLARS ($500), ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY;
AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN
THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY BUT SHALL CONTINUE FROM
TIME TO TIME, AND AT ALL TIMES, UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER
MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT, AND STATES THAT EITHER A REPRESENTATIVE
OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER’S ATTENTION OR BORROWER HAS BEEN REPRESENTED
BY INDEPENDENT LEGAL COUNSEL.


 





 




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	10.	STATE-SPECIFIC
    PROVISIONS:


 




 


VIRGINIA
(for residents of Virginia)


 


CONFESSION
OF JUDGMENT. UPON A DEFAULT IN PAYMENT OF THIS NOTE AT MATURITY, WHETHER BY ACCELERATION OR OTHERWISE, BORROWER HEREBY IRREVOCABLY
AUTHORIZES AND EMPOWERS LENDER, AS BORROWER’S ATTORNEY-IN-FACT, TO APPEAR IN THE CLERK’S OFFICE AND TO CONFESS JUDGMENT
AGAINST BORROWER FOR THE UNPAID AMOUNT OF THIS NOTE AS EVIDENCED BY THE AFFIDAVIT SIGNED BY AN OFFICER OF LENDER SETTING FORTH
THE AMOUNT THEN DUE, ATTORNEYS’ FEES PLUS COSTS OF SUIT, AND TO RELEASE ALL ERRORS, AND WAIVE ALL RIGHTS OF APPEAL. BY A
WRITTEN INSTRUMENT, LENDER MAY APPOINT A SUBSTITUTE FOR THE ABOVE-NAMED ATTORNEY-IN-FACT. IF A COPY OF THIS NOTE, VERIFIED BY
AN AFFIDAVIT, SHALL HAVE BEEN FILED IN THE PROCEEDING, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY.
BORROWER WAIVES THE RIGHT TO ANY STAY OF EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OF HEREAFTER IN EFFECT. NO SINGLE
EXERCISE OF THE FOREGOING WARRANT AND POWER TO CONFESS JUDGMENT WILL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE
SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID; BUT THE POWER WILL CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM
TIME TO TIME, AS LENDER MAY ELECT, UNTIL ALL AMOUNTS OWING ON THIS NOTE HAVE BEEN PAID IN FULL.


 


WASHINGTON
(for residents of Washington)


 


ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.


 


WISCONSIN
(for residents of Wisconsin)


 


EACH
BORROWER WHO IS MARRIED REPRESENTS THAT THIS OBLIGATION IS INCURRED IN THE INTEREST OF HIS OR HER MARRIAGE OR FAMILY.


 





 




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	11.	BORROWER’S
    NAME(S) AND SIGNATURE(S):


 


By
signing below, each individual or entity becomes obligated under this Note as Borrower.


 




 


Borrower:


 


Eastside
Distilling, Inc.


 


	By:	/s/
    Lawrence Firestone	 
	Name:	Lawrence
    Firestone	 
	Title:	CEO	 
	Date:	4/15/2020
    | 2:19 PM EDT	 


 





 




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