Exhibit 10.3


 


THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED
FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.


 


PROMISSORY NOTE  


 


	Principal Amount: $250,000	Dated as of October 31, 2020



 


Avalon Acquisition Inc., a Delaware corporation
(the “Maker”), promises to pay to the order of, Avalon Acquisition Holdings LLC, a Delaware limited liability
company or its registered assigns or successors in interest (“Payee”), or order, the principal sum of Two Hundred
Fifty Thousand Dollars ($250,000) or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid under
this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions
described below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise
determined by the Maker to such account as Payee may from time to time designate by written notice in accordance with the provisions
of this Note.    


 


1.     Principal. The entire unpaid
principal balance of this Note shall be payable on the earlier of: (i) June 30, 2021 , or (ii) the date on which
Maker consummates an initial public offering of its securities (such earlier date, the “Maturity Date”). The
principal balance may be prepaid at any time. Under no circumstances shall any individual, including but not limited to any officer,
director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.


 


2.     Drawdown Requests. Maker and
Payee agree that Maker may request, from time to time, up to One Hundred Thousand Dollars ($100,000) in drawdowns under this Note
to be used for costs and expenses related to Maker’s formation and the proposed initial public offering of its securities
(the “IPO”). Principal of this Note may be drawn down from time to time prior to the Maturity Date upon written
request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request must state the amount to be
drawn down. Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request;
provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed Two Hundred Fifty
Thousand Dollars ($250,000). No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any
Drawdown Request by Maker.


 


3.     Interest. No interest shall
accrue on the unpaid principal balance of this Note.


 


4.     Application of Payments. All
payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including
(without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction
of the unpaid principal balance of this Note.


 


5.     Events of Default. The following
shall constitute an event of default (“Event of Default”):


 


(a)     Failure
to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business
days of the date specified above.


 


(b)     Voluntary
Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization,
rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or
the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts
become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.


 


(c)     Involuntary
Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker
in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering
the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days.





 






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6.     Remedies.


 


(a)     Upon the occurrence
of an Event of Default, specified in Section 5(a), and such default continues for three (3) business days, hereof, Payee
may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of
this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing
the same to the contrary notwithstanding.


 


(b)     Upon the occurrence
of an Event of Default, specified in Sections 5(b) or 5(c), and such default continues for ten (10) business days, the unpaid
principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become
due and payable, in all cases without any action on the part of Payee.


 


7.     Waivers. Maker and all endorsers
and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of
protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of
this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or
personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution,
or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any
real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may
be sold upon any such writ in whole or in part in any order desired by Payee.


 


8.     Unconditional Liability. Maker
hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this
Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be
affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee,
and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to
the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become
parties hereto without notice to Maker or affecting Maker’s liability hereunder.


 


9.     Notices. All notices, statements
or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally
or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address
designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number
as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided
to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication
so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following
receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an
overnight courier service or five (5) days after mailing if sent by mail.


 


10.     Construction. THIS NOTE SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.


 


11.     Severability. Any provision
contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.


 


12.     Trust Waiver. Notwithstanding
anything herein to the contrary, Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”)
in or to any distribution of or from the trust account to be established in which the proceeds of the IPO conducted by the
Maker (including the deferred underwriters discounts and commissions) and the proceeds of the sale of the warrants issued in a
private placement to occur on or prior to the consummation of the IPO are to be deposited, as described in greater detail in the
registration statement and prospectus to be filed with the Securities and Exchange Commission in connection with the IPO, and hereby
agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.


 






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13.     Amendment; Waiver. Any amendment
hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and Payee.


 


14.     Assignment. No assignment
or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise)
without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be
void.


 


[Signature page follows]


 









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


 


	 	
        AVALON ACQUISITION INC.

         

	 	
        By:
	
        


	 	Name:	R. Rachel Hsu

	 	Title:	Chief Financial Officer



 


	
        Acknowledged and Agreed to

         

        as of the date first written above,
	 
	 	 
	
        AVALON ACQUISITION HOLDINGS LLC

         
	 
	By:	
                        

	 
	Name:	
        S. Craig Cognetti






	 
	Title:	
        Managing Member



	 


 






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