Exhibit 10.3


 


PROMISSORY NOTE


 


	Principal	Loan Date	Maturity	Loan No	Call / Coll	Account	Officer	Initials
	$
    10,000,000.00	07-14-2016	03-01-2018	155354101	 	 	765	 
	References in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item

                                                                                Any item above containing “***” has been omitted due to text length limitations.





 


	Borrower:	BISCO INDUSTRIES, INC.	 	Lender:	COMMUNITY BANK
	 	1500 NORTH LAKEVIEW AVENUE	 	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	 	1750 S. STATE COLLEGE BLVD.
	 	 	 	 	ANAHEIM, CA 92806
	 	 	 	 	(800) 788-9999


 





 



 


	Principal Amount: $10,000,000.00	Date of Note: July 14, 2016


 


PROMISE TO PAY. BISCO INDUSTRIES, INC.
(“Borrower”) promises to pay to COMMUNITY BANK (“Lender”), or order, in lawful money of the United States
of America, the principal amount of Ten Million & 00/100 Dollars ($10,000,000.00) or so much as may be outstanding, together
with Interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each
advance until repayment of each advance.


 


PAYMENT. Borrower will pay this loan in
one payment of all outstanding principal plus all accrued unpaid interest on March 1, 2018. In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of each payment date, beginning August 1, 2016, with all subsequent interest
payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will
be applied to any accrued unpaid interest; then to principal; then to late charges; then to any unpaid collection costs. Borrower
will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.


 


VARIABLE INTEREST RATE. The interest
rate on this Note is subject to change from time to time based on changes in an independent index which is the Wall Street Journal
Prime Rate, which is the Prime Rate published in the “Money Rates” section of the Wall Street Journal from time to
time (the “Index”), The Index is not necessarily the lowest rate charged by Lender on Its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower
the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each day. Borrower understands
that Lender may make loans based on other rates as well. The Index currently Is 3.500% per annum. Interest on the unpaid
principal balance of this Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using
a rate equal to the Index, resulting in an initial rate of 3.500%. NOTICE: Under no circumstances wilt the interest rate on this
Note be more than the maximum rate allowed by applicable law.


 


INTEREST CALCULATION METHOD. Interest on
this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied
by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest
payable under this Note is computed using this method.


 


PREPAYMENT. Borrower agrees that all
loan fees and other prepaid finance charges are earned fully as of the date ofthe loan and will not be subject to refund upon
early payment (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, Borrower
may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to
by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest.
Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in
full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it
without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed
to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that
indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions
or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: COMMUNITY BANK, ANAHEIM BRANCH, 1750
S. STATE COLLEGE BLVD., ANAHEIM, CA 92806.


 


LATE CHARGE. If a payment is 10 days
or more late, Borrower will be charged 6.000% of the unpaid portion of the regularly scheduled payment or $5.00, whichever
is greater.


 


INTEREST AFTER DEFAULT. Upon default,
the interest rate on this Note shall, if permitted under applicable law, immediately increase by adding an additional 5.000 percentage
point margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change
that would have applied had there been no default.


 


DEFAULT. Each of the following shall
constitute an event of default (“Event of Default”) under this Note:


 


Payment Default. Borrower fails to make
any payment when due under this Note.


 


Other Defaults. Borrower fails to comply
with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents
or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender
and Borrower.


 


Default in Favor of Third Parties.
Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s
ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents.


 


False Statements. Any warranty,
representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.


 


Insolvency. The dissolution
or termination of Borrower’s existence as a going business, the Insolvency of Borrower, the appointment of a receiver for any
part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of
any proceeding under any bankruptcy or Insolvency laws by or against Borrower.


 


Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method,
by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment
of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.


 


Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.


 




     


     


    

 





	 	PROMISSORY
    NOTE	 
	Loan No: 155354101	(Continued)	Page 2




 


Change In Ownership. Any change in ownership
of twenty-five percent (25%) or more of the common stock of Borrower.


 


Adverse Change. A material adverse change
occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.


 


Insecurity. Lender in good faith believes
itself insecure.


 


Cure Provisions. If any default, other
than a default in payment, is curable and if Borrower has not been given a notice of a breach of the same provision of this Note
within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to Borrower demanding
cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.


 


LENDER’S RIGHTS. Upon default, Lender
may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower
will pay that amount.


 


ATTORNEYS’ FEES; EXPENSES. Lender may
hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,
subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit,
including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction),
and appeals. Borrower also will pay any court costs, in addition to all other sums provided by law.


 


GOVERNING LAW. This Note will be governed
by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California without
regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of California.


 


CHOICE OF VENUE. If there is a lawsuit,
Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of ORANGE County, State of California.


 


DISHONORED ITEM FEE. Borrower will
pay a fee to Lender of $15.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with
which Borrower pays is later dishonored.


 


RIGHT OF SETOFF. To the extent permitted
by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the
future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by
law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness
against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect
Lender’s charge and setoff rights provided in this paragraph.


 


COLLATERAL. Borrower acknowledges this
Note is secured by Collateral as described per Commercial Security Agreement of even date.


 


LINE OF CREDIT. This Note evidences
a revolving line of credit. Advances under this Note may be requested either orally or in writing by Borrower or as provided in
this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions,
or directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above. The following person or persons
are authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender’s
address shown above, written notice of revocation of such authority: GLEN F. CEILEY, Chairman/CEO of BISCO INDUSTRIES, INC.
Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person
or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.


 


COUNTERPARTS. This agreement, document
or instrument may be executed in any number of counterparts and by different parties on separate counterparts, each of which when
executed and delivered, shall be deemed to be an original and all of which taken together shall constitute one and the same agreement,
document or instrument. Delivery by facsimile or by electronic transmission in portable document format (PDF) of an executed counterpart
of this agreement, document or instrument is as effective as delivery of an originally executed counterpart of this agreement,
document or instrument.


 


JUDICIAL REFERENCE. Borrower and Lender
agree that any dispute, action, proceeding or hearing (’‘Dispute”) arising out of, or relating to, this Agreement shall be
determined by a consensual general judicial reference pursuant to the provisions of California Code of Civil Procedure Section
638 et seq.; as such statutes may be amended or modified from time to time. Upon a written request, or upon an appropriate motion
by either party to this Agreement, any pending action relating to any Dispute and every Dispute shall be heard by a retired judge
or justice of the courts of the State of California or a federal court judge (the “Referee’’), who shall try all issues (including
any and all questions of law and questions of fact relating thereto), and issue findings of fact and conclusions of law and report
a statement of decision. The Referee’s statement of decision will constitute the conclusive determination of the Dispute.
Borrower and Lender agree that the Referee shall have the power to issue all legal and equitable relief appropriate under the
circumstances before him/her in the same manner as would a judge sitting without a jury.


 


PRIOR NOTE. This Promissory Note amends
and restates that certain prior Promissory Note dated November 15, 2000 along with all modification(s) and amendment(s) thereto.


 


SUCCESSOR INTERESTS. The terms of this
Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall inure
to the benefit of Lender and its successors and assigns.


 


NOTIFY US OF INACCURATE INFORMATION WE REPORT
TO CONSUMER REPORTING AGENCIES. Borrower may notify Lender if Lender reports any inaccurate information about Borrower’s account(s)
to a consumer reporting agency. Borrower’s written notice describing the specific inaccuracy(ies) should be sent to Lender at the
following address: COMMUNITY BANK Loan Support Group P.O. Box 54477 Los Angeles, CA 90054.


 


GENERAL PROVISIONS. If any part of
this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether
as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of
or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.


 




     


     


    

 





	 	PROMISSORY
    NOTE	 
	Loan No: 155354101	(Continued)	Page 3


 


ILLINOIS INSURANCE NOTICE. Unless Borrower
provides Lender with evidence of the insurance coverage required by Borrower’s agreement with Lender, Lender may purchase
insurance at Borrower’s expense to protect Lender’s interests in the collateral. This insurance may, but need not,
protect Borrower’s interests. The coverage that Lender purchases may not pay any claim that Borrower makes or any claim
that is made against Borrower in connection with the collateral. Borrower may later cancel any insurance purchased by Lender,
but only after providing Lender with evidence that Borrower has obtained insurance as required by their agreement. if Lender purchases
insurance for the collateral. Borrower will be responsible for the costs of that insurance, including interest and any other charges
Lender may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration
of the insurance. The costs of the insurance may be added to Borrower’s total outstanding balance or obligation. The costs
of the insurance may be more than the cost of insurance Borrower may be able to obtain on Borrower’s own.


 


PRIOR TO SIGNING THIS NOTE, BORROWER READ
AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS
OF THE NOTE.


 


BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THIS PROMISSORY NOTE.


 


BORROWER:


 


	BISCO INDUSTRIES, INC.	 
	 	 	 
	By:	/s/ GLEN F. CEILEY	 
	 	GLEN F. CEILEY, Chairman/CEO of BISCO INDUSTRIES, INC.	 




 


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