Document:

Exhibit
10.4

 

	PROMISSORY
    NOTE	
	 	International
    Bank of Commerce

 

	Principal	 	 	Loan
    Date	 	Maturity	 	 	Loan
    Number	 	 	Officer	 	Initial	 
	$	7,000,000.00	 	 	7/29/2022	 	 	7/29/2027	 	 	 	1605821438	 	 	Kenneth
    Skillman	 	 	 

 

	Borrower(s):	Greystone
    Logistics, Inc.	Lender:
    International Bank of Commerce
	 	Greystone
    Manufacturing, L.L.C	 

 

 

 

For
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned, jointly and severally,
(hereinafter “Borrower”, whether one or more) promise to pay to the order of International Bank of Commerce (hereinafter
“Lender”), at 3817 NW Expressway, Suite 100, Oklahoma City, Oklahoma 73112, or such other address as Lender may specify from
time to time, the sum of Seven Million Dollars and No Cents ($7,000,000.00), in legal and lawful money of the United States of America,
with interest as it accrues on the outstanding principal balance from date of advance of such principal until paid.

 

The
interest rate shall be floating at 0.5% per annum above the New York Prime Rate (Prime Rate) (as described below) as it fluctuates from
time to time; provided, however, that in no event shall the rate of interest to be paid on the unpaid principal of this Note be less
than 4.50% per annum, nor more than the maximum legal rate allowed by applicable law. The starting interest rate on this Note shall be
5.25% per annum. The rate of interest due hereunder shall be recomputed as of the date of any change in the Prime Rate.

 

The
NEW YORK PRIME RATE shall mean the annual lending rate of interest announced from time to time by the JP Morgan Chase & Co., New
York, New York, as its prime rate. If the New York Prime Rate has been selected as the Prime Rate and if, thereafter, a prime rate is
not announced by JP Morgan Chase & Co., New York, New York, then the International Bank of Commerce Prime Rate minus one percent
(1%) shall be the Prime Rate.

 

The
INTERNATIONAL BANK OF COMMERCE PRIME RATE shall mean the annual lending rate of interest announced from time to time by International
Bank of Commerce, as its prime rate.

 

Use
of the term Prime Rate is not to be construed as a warranty or representation that such rate is more favorable than another rate or index,
that rates on other loans or credit facilities may not be based on other indices or that rates on loans to others may not be made below
such prime rate.

 

At
Lenders sole discretion, any interest rate increase will take the form of higher periodic payments, a greater balloon payment (if applicable),
and/or an increase in the number of periodic payments. The periodic payment amount will not increase more than once per month, with no
limitation on such increase. Any new periodic payment amount will be due and payable only after timely and proper notice of such new
payment amount from Lender. This paragraph is inapplicable if the maturity of the outstanding indebtedness under this Note is accelerated
and/or demanded in full.

 

MULTIPLE
ADVANCE NON-REVOLVING

 

1. Note.
This Note is a multiple advance non-revolving credit facility for the Borrower. Borrower acknowledges that the original principal amount
of this Note as stated therein has been advanced to Borrower at the time of execution of the Note or may be advanced at various times
to Borrower by Lender. As used herein, the term Loan Documents means, collectively, this Note and any other document or instrument executed
in connection with this Note by Borrower, any guarantor of this Note, and any party pledging property as security for the repayment of
this Note (Pledgor).

 

2. Principal
and Interest. Borrower shall be obligated to repay only that portion of the principal amount which has actually been advanced and not
repaid, and interest shall accrue as set forth in this Note on the unpaid outstanding principal balance from date of the advance of such
principal until repaid. All advances are subject to the conditions set forth herein and in all other Loan Documents and agreements between
the parties hereto.

 

3. Advances.
The advances shall be made pursuant to and subject to the terms and conditions hereof and of the other Loan Documents and agreements
between the parties, and if and only if (i) all conditions precedent to an advance have been fulfilled,(ii) there has been no Event of
Default which is continuing, and (iii) the aggregate amount of the outstanding unpaid principal on this Note, plus the amount of any
prior advances of principal, whether or not repaid, plus the amount of any and all pending requests for an advance, plus the amount of
any and all advances in process, plus the amount of any and all advances that have been authorized, plus all accrued and unpaid interest
and accrued and unpaid late charges, and plus any amounts advanced by Lender on Borrower’s behalf, does not exceed the original
principal balance of the Note. Borrower may at any time, and from time to time, pay the outstanding unpaid balance of the Note, or a
portion thereof, and all accrued and unpaid interest due. The non-revolving feature of this Note expires on, and no additional advances
of principal will be made after, Final Maturity.

 

4. Continuation
of Lien. Lender and Borrower contemplate that by reason of payments of this Note, there may be times when no indebtedness is owing on
the Note, but notwithstanding such occurrences, this Note, all liens securing this Note, and the other Loan Documents shall remain in
full force and effect unless same be released in writing by Lender, at the request of Borrower or the Pledgor of the property subject
to the lien or liens.; otherwise this Note and the other Loan Documents and all liens securing same shall remain in full force and effect
to secure any and all advances, and any other indebtedness of Borrower, regardless of any additional security that may be taken as collateral
for the repayment of any future indebtedness, and shall be unaffected by any renewals, extensions, rearrangements, modifications and/or
partial releases hereunder.

 

The
indebtedness evidenced by this Note was evaluated, analyzed and ultimately priced based upon (i) Borrower’s representation that
it would establish and maintain its primary deposit relationship with Lender, and/or (ii) the entire banking relationship between Borrower
and Lender. Therefore, (i) if Borrower’s primary deposit relationship is not established and maintained with Lender, and/or (ii)
if there is a material adverse change in the deposit relationship between Borrower and Lender, then Lender, in its sole and absolute
discretion, may, after ninety (90) days written notice, increase the interest rate charged in connection with this credit facility by
up to 2% above the interest rate as set forth above, as it may float from time to time.

 

    	Page 1 of 9

    	 

    

 

To
secure payment of this Note, and, to the extent allowed by law, all other indebtedness which may at any time be owing by the Borrower,
or any of them, Borrower hereby grants to Lender a security interest and lien on the following collateral (collectively, the “Collateral”):
Blanket UCC Filing on All Assets

 

Borrower
agrees to take adequate care of the Collateral and to insure the Collateral with a company satisfactory to Lender, for such risks and/or
hazards, and in such amounts as Lender directs. If Borrower fails to furnish Lender with proof of required insurance coverage, Lender
shall have the authority to purchase insurance (including single interest insurance, which may provide protection only for Lender) and
add the premium for such insurance, together with interest at the rate set forth above, to the balance of this Note.

 

Interest
shall be calculated on a 360-day factor applied on a 365-day year or a 366-day year, in the event that the year is a leap year, on the
unpaid principal to the date of each installment paid; provided, however, that in the event the interest rate reaches the maximum rate
allowed by applicable law, said maximum legal rate shall be computed on a full calendar year 365/365 days basis or on a 366/366 days
basis, in the event that the year is a leap year. The interest charged and herein contracted for will not exceed the maximum rate allowed
by law.

 

To
the extent allowed by law, any and all matured unpaid amounts will bear interest computed on a full calendar year 365/365 days basis,
or on a 366/366 days basis in the event that the year is a leap year, at the maximum legal rate of interest allowed by applicable state
law, unless federal law allows a higher interest rate, in which case Borrower agrees to pay the rate allowed by federal law. If applicable
state or federal law does not set a maximum rate of interest for matured unpaid amounts, then Borrower agrees that the maximum rate for
such amounts shall be eighteen percent (18%) per annum.

 

To
the extent allowed by law, as the late payment charge under this Note, Lender may in its sole discretion (i) increase the interest on
the principal portion of any payment amount that is not received by the payment due date to the maximum rate allowed by law, computed
on a full calendar year basis from the payment due date until paid, or (ii) should any payment not be made within ten (10) days from
the due date, require Borrower to pay a onetime “late charge” per late payment equal to five percent (5%) of the amount of
the past due principal and interest of such payment, with a minimum of $10.00 and a maximum of $1,500.00 per late payment. The “late
charge” may be assessed without notice and shall be immediately due and payable. No late charge will be assessed on any payment
which is current and is a full payment of principal and/or interest then due regardless of whether late charge(s) are due for any prior
payments. This paragraph is inapplicable if the outstanding indebtedness under the Note is accelerated and/or demanded in full.

 

Notwithstanding
anything contained herein to the contrary, if the Loan is subject to the provisions of 24 Code of Federal Regulations Part 201 (Title
1 Property Improvement and Manufactured Home Loans), then the late charge provisions of this paragraph shall be applicable to the exclusion
of any other late charge and/or default interest provisions in any instrument relating to any past due installment of principal and/or
interest due under this Note. Borrower agrees to pay to Lender a late charge for installments of principal and interest which are in
arrears for fifteen (15) calendar days or more. The late charge shall be in an amount equal to the lesser of: (a) five percent (5%) of
each late installment of principal and interest, up to a maximum of $10.00
per installment for any property improvement loan and $15.00 per installment for any manufactured home loan, or (b) the maximum amount
permitted by applicable federal or state law. The sum of such late charges plus the interest charged under this Note and other charges
deemed interest by law shall be limited to the maximum nonusurious amount permitted by applicable federal or state law. This paragraph
is inapplicable if the outstanding indebtedness under this Note is accelerated and/or demanded in full.

 

The
outstanding and unpaid principal of this Note and all accrued and unpaid interest are payable immediately upon demand, or if no demand
is made, then such sums are payable as follows:

 

	NUMBER
    OF PAYMENTS	 	 	FREQUENCY	 	 	NUMBER
    OF PAYMENTS	 	WHEN
    PAYMENTS ARE DUE
	59	 	 	Monthly	 	 	$100,026.58
    Principal with Interest Included	 	Beginning
    August 29, 2022 At Final Maturity
	1	 	 	Final	 	 	Principal
    balance plus accrued and unpaid interest	 	 

 

FINAL
MATURITY DATE: July 29, 2027

 

Each
payment shall be applied as of its scheduled due date and in the order of application as the Lender in its sole discretion may from time
to time elect.

 

All
outstanding unpaid principal, all accrued and unpaid interest, and all fees, accrued and unpaid late charges, and/or other charges incurred
by, or for the benefit of, Borrower in connection with this Note which remain due and owing on the Final Maturity Date are due and payable
on such date.

 

Lender
may, at its discretion, adjust the amount of periodic payments described above to ensure that the remaining payments will fully amortize
the principal of this Note by the Final Maturity Date, or, if the payment schedule provides for a Balloon Payment (as hereinafter defined),
Lender may adjust the amounts of remaining periodic payments so that the Agreed Amortization Amount (as hereinafter defined) will not
be reduced. As used herein, (i) the term “Balloon Payment” means a payment of principal (together with any accrued unpaid
interest) required on the Final Maturity Date when the scheduled periodic payments do not fully amortize the principal hereof by the
Final Maturity Date, and (ii) the term “Agreed Amortization Amount” means the amount of principal that will be repaid prior
to the Final Maturity Date assuming all initially scheduled payments are made in a timely manner and the interest rate in effect on the
date hereof does not change. Any new monthly payment will be paid from the first monthly payment date after the change date until the
amount of the monthly payment changes again.

 

THIS
OBLIGATION HAS THE FOLLOWING DEMAND FEATURE:

 

At
any time, and from time to time, whether prior to and/or during said scheduled payment dates, Lender may, in its sole and absolute discretion,
reschedule, rearrange and/or accelerate, in whole or in part, the outstanding and unpaid principal balance, and all accrued and unpaid
interest and all accrued and unpaid late charges under this Note. Borrower agrees and promises to pay Lender immediately all accelerated
unpaid principal and all accrued and unpaid interest on such principal, and all accrued and unpaid late charges. No notice of intent
to accelerate shall be required of Lender and Borrower expressly waives any right to notice of Lender’s intent to accelerate. The
foregoing right to make demand for immediate payment of this Note, in whole or in part, may be exercised by Lender for any reason whatsoever,
whether or not Borrower is in default hereunder and in advance of the Final Maturity Date.

 

    	Page 2 of 9

    	 

    

 

THIS
OBLIGATION HAS A BALLOON PAYMENT PROVISION:

 

THIS
LOAN IS PAYABLE IN FULL ON THE FINAL MATURITY DATE SET FORTH HEREIN IF NO PRIOR DEMAND HAS BEEN MADE. ON THE FINAL MATURITY DATE, YOU
MUST REPAY THE ENTIRE OUTSTANDING UNPAID PRINCIPAL BALANCE, ALL ACCRUED AND UNPAID INTEREST, AND ALL FEES, LATE CHARGES, AND/OR OTHER
CHARGES INCURRED BY, OR ON BEHALF OF, BORROWER IN CONNECTION WITH THIS LOAN, WHICH REMAIN UNPAID. LENDER IS UNDER NO OBLIGATION TO REFINANCE
THE LOAN, OR ANY PORTION THEREOF, AT THAT TIME. YOU WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN, OR YOU
WILL HAVE TO FIND A LENDER, WHICH MAY BE THIS LENDER, WHICH AGREES TO LEND YOU THE MONEY TO REFINANCE. IF YOU REFINANCE THIS LOAN AT
MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN, EVEN IF YOU OBTAIN REFINANCING FROM
THIS LENDER.

 

The
occurrence of any of the following events shall constitute an event of default (“Event of Default”) under this Note:

 

(a) Borrower
fails to pay any of the indebtedness evidenced by this Note when the same shall become due and payable; or

 

(b) Borrower
(i) fails to perform any of Borrower’s other obligations under this Note or the other Loan Documents, or any other event of default
or breach occurs under this Note or the other Loan Documents, or (ii) to the extent allowed by law, and except as to loans for homestead,
homestead equity, home equity lines of credit, and/or household or other consumer goods, fails to perform any of Borrower’s obligations
under any other promissory note, security agreement, loan agreement or other agreement between Lender and Borrower or any other event
of default or breach occurs thereunder; or

 

(c) any
(i) statement, representation or warranty made by Borrower in this Note, the other Loan Documents, or in any other agreement between
Lender and Borrower, or (ii) any information contained in any financial statement or other document delivered to Lender by or on behalf
of Borrower contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement, representation
or warranty therein not misleading in light of the circumstances in which they were made; or

 

(d) Borrower:
(i) dies or becomes physically or mentally incapacitated; or (ii) in the case of a Borrower who is not a natural person, dissolves, terminates
or in any other way ceases to legally exist or has its entity powers or privileges suspended or revoked for any reason; or (iii) makes
an assignment for the benefit of creditors, or enters into any composition, marshalling of assets or similar arrangement in respect of
its creditors generally; or (iv) becomes insolvent or generally does not pay its debts as such debts become due; or (v) conceals, removes,
or permits to be concealed or removed, any part of Borrower’s property, with intent to hinder, delay or defraud its creditors or
any of them, or makes or suffers a transfer of any of Borrower’s property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law, or makes any transfer of Borrower’s property to or for the benefit of a creditor at a time when other
creditors similarly situated have not been paid; or

 

(e) a
trustee, receiver, agent or custodian is appointed or authorized to take charge of any property of Borrower for the purpose of enforcing
a lien against such property or for the purpose of administering such property for the benefit of its creditors; or

 

(f) an
order (i) for relief as to Borrower is granted under Title 11 of the United States Code or any similar law, or (ii) declaring Borrower
to be incompetent is entered by any court; or

 

(g)
Borrower files any pleading seeking, or authorizes or consents to, any appointment or order described in subsections (e) or (f) of this
paragraph above, whether by formal action or by the admission of the material allegations of a pleading or otherwise; or

 

(h) application
is made for or there is an enforcement of any lien, levy, seizure, garnishment or attachment of any property of the Borrower for the
purposes of collecting a lawful debt; or

 

(i) any
action or proceeding seeking any appointment or order described in subsections (e) or (f) of this paragraph above is commenced without
the authority or consent of Borrower, and is not dismissed within thirty (30) days after its commencement; or

 

(j) Borrower
shall become involved (whether as plaintiff or defendant) in any material litigation (including, without limitation, matrimonial litigation)
or arbitral or regulatory proceedings that, if determined adversely to Borrower, could materially and adversely affect Borrower’s
financial position, or could affect Borrower’s ability to repay the indebtedness evidenced by this Note, or could adversely affect
the Collateral or any portion thereof or Lender’s security interest therein; or

 

(k) Borrower,
in Lender’s opinion, has suffered a material change in financial condition which, in Lender’s opinion, impairs the ability
of Borrower to repay the indebtedness evidenced by this Note or to properly perform Borrower’s obligations under this Note or the
other Loan Documents; or

 

(l) any
of the events or conditions described in subsections (d) through (k) of this paragraph above happen to, by or with respect to any pledgor
of the Collateral or to any guarantor or other Obligor of the Note; or

 

(m) Lender
believes, as a result of any material change in condition whether or not described herein, that Lender will be adversely affected, that
this Note is inadequately secured, or that the prospect of payment of any of the indebtedness evidenced by this Note or performance of
any of Borrower’s obligations under the Loan Documents is impaired, or

 

(n) to
the extent allowed by law, and except as to loans for homestead, homestead equity, home equity lines of credit, and/or household or other
consumer goods, as to each Borrower with regard to any other credit facility with any other lender, any monetary default and/or any non-monetary
default occurs which results in acceleration of the indebtedness by any such other lender; and each Borrower agrees to notify Lender
of any such default within fifteen (15) days after the occurrence of the default.

 

Upon
the occurrence of an Event of Default, Lender may, at its option, without notice to Borrower or any other Obligor except as otherwise
expressly agreed by Lender in writing, declare the following amounts (or any portion thereof) at once due and payable (and upon such
declaration, the same shall be at once immediately due and payable and may be collected forthwith), whether or not there has been a prior
demand for payment and regardless of the stipulated date of maturity: (i) the remaining unpaid principal balance of this Note outstanding,
(ii) the accrued and unpaid interest under this Note, (iii) the accrued and unpaid late charges under this Note, (iv) any Swap Related
Loss Lender is entitled to collect as hereinafter provided, (v) all other sums advanced or otherwise payable under this Note or any other
Loan Document and owed by Borrower to Lender and all interest thereon, and (vi) any other indebtedness of Obligor the repayment of which
is secured by one or more of the Loan Documents.

 

Borrower
and Lender intend that the loan evidenced by this Note (the “Loan”) shall be in strict compliance with applicable usury laws.
If at any time any interest contracted for, charged, or received under this Note or otherwise in connection with the Loan would be usurious
under applicable law, then regardless of the provisions of this Note or the documents and instruments evidencing, securing or otherwise
executed in connection with the Loan or any action or event (including, without limitation, prepayment of principal hereunder or acceleration
of maturity by the Lender) which may occur with respect to this Note or the Loan, it is agreed that all sums determined to be usurious
shall be immediately credited by the Lender as a payment of principal hereunder, or if this Note has already been paid, immediately refunded
to the Borrower. All compensation which constitutes interest under applicable law in connection with the Loan shall be amortized, prorated,
allocated and spread over the full period of time any indebtedness is owing by Borrower and/or of the term of the Loan, whichever is
longer, to the greatest extent permissible without exceeding the applicable maximum rate allowed by applicable law in effect from time
to time during such period.

 

    	Page 3 of 9

    	 

    

 

IN
THE EVENT ANY ITEM, ITEMS, TERMS OR PROVISIONS CONTAINED IN THIS INSTRUMENT ARE IN CONFLICT WITH THE APPLICABLE STATE OR FEDERAL LAW,
THIS INSTRUMENT SHALL BE AFFECTED ONLY AS TO ITS APPLICATION TO SUCH ITEM, ITEMS, TERMS OR PROVISIONS, AND SHALL IN ALL OTHER RESPECTS
REMAIN IN FULL FORCE AND EFFECT. IT IS UNDERSTOOD AND AGREED THAT IN NO EVENT AND UPON NO CONTINGENCY SHALL THE BORROWER OR ANY PARTY
LIABLE HEREON, OR HEREFOR BE REQUIRED TO PAY INTEREST IN EXCESS OF THE RATE ALLOWED BY THE APPLICABLE STATE LAW OR FEDERAL LAW, IF SUCH
FEDERAL LAW PERMITS A GREATER RATE OF INTEREST. THE INTENTION OF THE PARTIES IS TO CONFORM STRICTLY TO THE APPLICABLE USURY LAWS AS NOW
OR HEREINAFTER CONSTRUED BY THE COURTS HAVING JURISDICTION.

 

THE
BORROWER, ENDORSERS, SURETIES, GUARANTORS AND ALL PERSONS TO BECOME LIABLE ON THIS NOTE (THE “OBLIGORS”) HEREBY, JOINTLY
AND SEVERALLY, WAIVE EXPRESSLY ALL NOTICES OF OVERDUE INSTALLMENT PAYMENTS AND DEMANDS FOR PAYMENT THEREOF, NOTICES OF INTENTION TO ACCELERATE
MATURITY, NOTICES OF ACTUAL ACCELERATION OF MATURITY, PRESENTMENT, DEMAND FOR PAYMENT, NOTICES OF DISHONOR, DISHONOR, PROTEST, NOTICES
OF PROTEST, AND DILIGENCE IN COLLECTION HEREOF. EACH OBLIGOR AGREES THAT THE LENDER MAY AT ANY TIME, AND FROM TIME TO TIME, UPON REQUEST
OF OR BY AGREEMENT WITH ANY OF THEM, RENEW THIS NOTE AND/OR EXTEND THE DATE OF MATURITY HEREOF OR CHANGE AND/OR REARRANGE THE TIME OR
METHOD OF PAYMENTS WITHOUT NOTICE TO ANY OF THE OTHER OBLIGORS, WHO SHALL REMAIN LIABLE FOR THE PAYMENT HEREOF. OBLIGORS WAIVE EXPRESSLY
THE LATE FILING OF ANY SUIT OR PRECEDING OR CAUSE OF ACTION HEREON, OR ANY DELAY IN THE HANDLING OF ANY COLLATERAL. OBLIGORS AGREE THAT
LENDER’S ACCEPTANCE OF PARTIAL OR DELINQUENT PAYMENTS OR FAILURE OF LENDER TO EXERCISE ANY RIGHT OR REMEDY CONTAINED HEREIN OR
IN ANY INSTRUMENT GIVEN AS SECURITY FOR THE PAYMENT OF THIS NOTE SHALL NOT BE A WAIVER OF ANY OBLIGATION OF THE OBLIGORS OR CONSTITUTE
A WAIVER OF ANY PRIOR OR SUBSEQUENT DEFAULT. THE LENDER MAY REMEDY ANY DEFAULT WITHOUT WAIVING THE DEFAULT REMEDIED AND MAY WAIVE ANY
DEFAULT WITHOUT WAIVING ANY OTHER PRIOR OR SUBSEQUENT DEFAULT.

 

To
the extent allowed by law, as security for this Note and all other indebtedness which may at any time be owing by Borrower (and any endorsers
and/or guarantors hereof) to Lender, Borrower (and any endorsers and/or guarantors hereof) grants to Lender (i) a security interest and
contractual lien in and to all of the Borrower’s (and any such endorser’s and/or guarantor’s ) collateral securing
other indebtedness of Borrower (or of any such endorsers and/or guarantors) to Lender, and (ii) a security interest, contractual lien
and contractual right of set-off in and to all of the Borrower’s (and any such endorser’s and/or guarantor’s) money,
credits, accounts and/or other property including repurchase agreements and other non-depository obligations, now in, or at any time
hereafter coming within, the custody or control of Lender, or any member Bank or branch Bank of International BancShares Corporation,
whether held in a general or special account or deposit, or for safekeeping or otherwise, excluding however, all IRA, KEOGH and trust
accounts upon which the grant of security interest or right of set-off would be prohibited. Every such security interest, lien and right
of set-off may be exercised without demand or notice to Borrower (or to any endorsers and/or guarantors hereof). No security interest,
lien or right of set-off to enforce such security interest or lien shall be deemed to have been waived by any act or conduct on the part
of Lender, or by any failure to exercise such right of set-off or to enforce such security interest or lien, or by any delay in so doing.
Every right of set-off security interest shall continue in full force and effect until such right of set-off, security interest or lien
is specifically waived or released by an instrument in writing executed by Lender. The foregoing provisions of this paragraph are in
addition to and not in lieu of any rights of set-off allowed by law.

 

To
the extent allowed by law, in connection with any transaction between Borrower and Lender at any time in the past, present or future,
in the event Borrower, individually or jointly with others, has granted or grants Lender a lien on any real and/or personal property,
Borrower agrees that the lien on such real and/or personal property, to the extent of Borrower’s interest therein, shall also secure
the indebtedness of Borrower to Lender evidenced by this Note and all renewals, extensions, rearrangements and modifications hereof.

 

If
this Note, or any part hereof, is not paid according to its terms, is placed in the hands of an attorney for collection, or is collected
through probate, bankruptcy or other judicial or non-judicial proceedings, whether matured by expiration of time or by the exercise of
the option given to the Lender to mature it, Borrower and all parties now or hereafter liable hereon hereby agree to pay an additional
amount equal to a reasonable and necessary attorney’s fees and associated costs for collection. Said attorney’s fees and
costs of collection, once liquidated and paid by Lender, will bear interest at the rate of interest applied to the matured and past-due
principal balance of this Note as such rate may change from time to time from the date advanced by Lender until paid.

 

Subject
to the provisions of this Note pertaining to Swap Transactions as hereinafter set out, Borrower reserves the right to prepay, prior to
maturity, all or any part of the principal of this Note without penalty, and interest shall immediately cease on any amount so prepaid.
All prepayments shall be applied to the last maturing installments of principal, without interrupting the regular installment payments.
Borrower will provide Lender written notice of any prepayment of principal together with such prepayment.

 

Any
assumption, if permitted by Lender, by any other person or persons, partnership, corporation, organization or any other entity without
an express written release signed by Lender, shall not release the liability of Borrower or any other Obligors for the payment of this
Note.

 

In
the event that the Collateral is sold, conveyed, or otherwise disposed of without the prior written consent of the Lender, the maturity
of this Note may, at the option of the Lender, be accelerated and Lender may immediately demand payment of the then outstanding principal
sum, together with all accrued and unpaid interest and late charges due thereon.

 

Borrower
shall be obligated to repay only that portion of the principal amount which has actually been advanced and not repaid, and interest shall
accrue on the unpaid outstanding principal balance from the date of the advance until paid.

 

Borrower
agrees to provide to Lender, at least on an annual basis, a Financial Statement, a Profit and Loss/Net Income Statement, copies of U.S.
Tax Returns, and any other information that may be reasonably requested by Lender.

 

    	Page 4 of 9

    	 

    

 

The
parties intend to conform strictly to the applicable federal, state, and local laws as now or hereafter construed by the courts having
jurisdiction. All agreements between the parties hereto (or any other party liable with respect to any portion of the indebtedness under
this Note or any instrument executed in connection herewith) are hereby limited by the provisions of this paragraph, which shall override
and control all such agreements, whether now existing or thereafter arising and whether written or oral. If from a construction of any
document related to any agreement between the parties hereto (or any other party liable with respect to any portion of the indebtedness
under this Note or any instrument executed in connection herewith ), any term(s) or provision(s) of the document is in conflict with,
or in violation of, applicable laws, any such construction shall be subject to the provisions of this paragraph and such document shall
be automatically reformed as to comply with applicable law, without the necessity of execution of any amendment or new document.

 

Financing
Statements: At Lender’s request Borrower will promptly sign all other documents, including financing statements and certificates
of title, to perfect, protect, and continue Lender’s security interest in the Collateral at the sole cost of Borrower. Borrower
hereby authorizes Lender to file a Financing Statement, an Amended Financing Statement and a Continuation Financing Statement (collectively
referred to as the “Financing Statement”) describing the Collateral. Where Collateral is in the possession of a third party,
Borrower will join with Lender in notifying the third party of Lender’s security interest and obtaining a Control Agreement from
the third party that it is holding the Collateral for the benefit of Lender.

 

In
the event any legal action or proceeding, by arbitration or otherwise, is commenced in connection with the enforcement of, or declaration
of rights under, this Note and/or any instrument or written agreement required or delivered under, in connection with, or pursuant to
the terms of this Note (collectively, the “Loan Documents”), and/or any controversy or claim, whether sounding in contract,
tort or statute, legal or equitable, involving in any way the financing or the transaction(s)evidenced by this Note, or any other proposed
or actual loan or extension of credit, the prevailing party shall be entitled to recover reasonable and necessary attorney’s fees
and paralegal costs (including allocated costs for in-house legal services), costs, expenses, expert witness fees and costs, and other
necessary disbursements made in connection with any such action or proceeding, in the amount determined by the fact-finder.

 

Lender,
in its sole discretion and without obligation on Lender to do so, may advance and pay sums on behalf and for the benefit of Borrower
for costs necessary for the protection and preservation of the Collateral and other costs that may be appropriate, in Lender’s
sole discretion, including but not limited to insurance premiums, ad valorem taxes, and attorney’s fees. Any sums which may be
so paid out by Lender and all sums paid for insurance premiums, as aforesaid, including the costs, expenses and attorney’s fees
paid in any suit affecting said property when necessary to protect Lender’s lien therein shall bear interest from the dates of
such payments at the interest rate applied to the matured and past-due principal balance of this Note and shall be paid by Borrower to
Lender upon demand, at the same place at which this Note is payable, and shall be deemed a part of the debt evidenced hereby and recoverable
as such in all aspects.

 

Borrower
and Lender hereby expressly acknowledge and agree that in the event of a default under this Note, or under any document executed by Borrower
in connection with, or to secure the payment of, this Note (1) Lender shall not be required to comply with Article 6132b-3.05(d) of the
Texas Revised Partnership Act or Subsection 152.306 of the Texas Business Organizations Code, if applicable, and (2) Lender shall not
be required to proceed against or exhaust the assets of Borrower before pursuing any remedy directly against one or more of the partners
of Borrower or the property of such partners.

 

If
Borrower is an entity formed under and/or governed by the Texas Business Organizations Code (“BOC”) the following shall apply:
(i) Notice to known claimants under BOC Section 11.052(a)(2) [or any similar statute of Borrower’s domiciliary state if Borrower
is not domiciled in the State of Texas] shall not be effective with respect to Lender unless it is delivered by certified mail, return
receipt requested and addressed to Dennis E. Nixon, President, at International Bancshares Corporation, P.O. Drawer 1359, Laredo, Texas
78042-1359 within thirty (30) days following the occurrence of the event requiring the winding up of Borrower, (ii) to the extent allowed
by applicable law, Borrower agrees that BOC Section 11.359 [or any similar statute of Borrower’s domiciliary state if Borrower
is not domiciled in the State of Texas] shall have no force or effect on the existence or validity of the indebtedness evidenced by the
Loan Documents and Borrower hereby waives all rights under said statutory provision, and (iii) in the event any portion of the indebtedness
evidenced by the Loan Documents shall be deemed to be extinguished pursuant to the provisions of BOC Section 11.359 [or any similar statute
of Borrower’s domiciliary state if Borrower is not domiciled in the State of Texas], such extinguishment shall have no effect on
the existence, validity, or enforceability of the Loan Documents other than Lender’s ability to obtain a judgment against Borrower
for repayment of the extinguished portion of such indebtedness.

 

Swap
Transactions and Swap Related Loss: The term “Swap Transaction”, as used herein, means (i) any transaction effected pursuant
to one or more agreements now existing or hereafter entered into between Borrower and Lender and/or any financial institution affiliated
with International BancShares Corporation (a “Lender Affiliate”) which is a rate swap, swap option, interest rate option
or other financial instrument or interest (including one or more options with respect to any such transaction), (ii) any type of transaction
that is similar to any transaction referred to in clause (i) above that is currently, or in the future becomes, recurrently entered into
in the financial markets and which is a forward swap, future, option or other derivative on one or more rates, or any combination of
the foregoing transactions, or (iii) any transaction that is similar to any transaction referred to in clause (i) or (ii) above except
that it is between Lender and/or a Lender Affiliate and any party or entity other than Borrower and is entered into by Lender and/or
such Lender Affiliate on account of a corresponding Swap Transaction that is described in clause (i) or (ii) above.

 

Notwithstanding
anything to the contrary contained in this Note or any other Loan Document, during any time that any Swap Transaction is in effect, Borrower
shall have no right whatsoever to make any prepayment of all or any part of the principal owing under this Note without Lender’s
prior written approval, which Lender may grant or withhold in Lender’s sole and absolute discretion,

 

For
purposes hereof, “prepayment” shall mean any instance wherein the principal under this Note is satisfied in full or in part
in advance and/or in excess of scheduled installments in any manner prior to the Final Maturity Date, whether voluntarily or involuntarily.
Prepayment shall include, but not be limited to: (i) payment upon or following acceleration of the maturity of this Note by Lender pursuant
to any applicable provision of this Note or any of the other Loan Documents, (ii) any payment of principal made prior to the Final Maturity
Date pursuant to any demand provisions of this Note, (iii) application of insurance or condemnation proceeds to discharge all or any
portion of the outstanding principal of this Note, (iv) payment of principal to Lender by any holder of a subordinate or superior interest
in the Collateral, or (v) any payment of principal after the Final Maturity Date is accelerated for any reason permitted hereunder or
under any of the other Loan Documents, including, without limitation, any acceleration of the Final Maturity Date resulting from any
sale or transfer of the Collateral pursuant to foreclosure, sale under power of sale, judicial order or trustee’s sale under the
Loan Documents; any payment of principal by sale, transfer or offsetting credit in connection with or under any bankruptcy, insolvency,
reorganization, assignment for the benefit of creditors, or receivership proceedings under any statute of the United States or any State
thereof involving Borrower and/or the Collateral

 

    	Page 5 of 9

    	 

    

 

In
the event of any prepayment during any time that any Swap Transaction is in effect, whether or not approved by Lender, Borrower shall
be obligated to pay to Lender upon demand, in addition to all other amounts due and payable to Lender under the Loan Documents at the
time of such prepayment, an amount determined by Lender to be the loss, cost and expense incurred by Lender and/or a Lender Affiliate
under, related to or arising from such Swap Transaction that is attributable to such prepayment (the “Swap Related Loss”).
Lender’s determination of the Swap Related Loss incurred by Lender, or a Lender Affiliate shall be conclusive and binding upon
Borrower absent manifest error.

 

ARBITRATION.

 

BINDING
ARBITRATION AGREEMENT

PLEASE
READ THIS CAREFULLY. IT AFFECTS YOUR RIGHTS.

 

BORROWER
AND LENDER AGREE TO ARBITRATION AS FOLLOWS (hereinafter referred to as the “Arbitration Provisions”):

 

	I.	Special
                                            Provisions and Definitions applicable to both CONSUMER DISPUTES and BUSINESS DISPUTES:

 

		(a)	Informal
                                            Resolution of Customer Concerns. Most customer concerns can be resolved quickly and to
                                            the customer’s satisfaction by contacting your account officer, branch manager or by
                                            calling the Customer Service Department in your region. The region and numbers are:

 

	 	1.	Laredo	956-722-7611
	 	2.	Austin	512-397-4506
	 	3.	Brownsville	956-547-1000
	 	4.	Commerce
    Bank	956-724-1616
	 	5.	Corpus
    Christi	361-888-4000
	 	6.	Eagle
    Pass	830-773-2313
	 	7.	Houston	713-526-1211
	 	8.	McAllen	956-686-0263
	 	9.	Oklahoma	405-841-2100
	 	10.	Port
    Lavaca	361-552-9771
	 	11.	San
    Antonio	210-518-2500
	 	12.	Zapata	956-765-8361

 

In
the unlikely event that your account officer, branch manager or the customer service department is unable to resolve a complaint to your
satisfaction or if the Lender has not been able to resolve a dispute it has with you after attempting to do so informally, you and the
Lender agree to resolve those disputes through binding arbitration or small claims court instead of in courts of general jurisdiction.

 

		(b)	Sending
                                            Notice of Dispute. If either you or the Lender intend to seek arbitration, then you or
                                            the Lender must first send to the other by certified mail, return receipt requested, a written
                                            Notice of Dispute. The Notice of Dispute to the Lender should be addressed to: Dennis E.
                                            Nixon, President, at International Bancshares Corporation, P.O. Drawer 1359, Laredo, Texas
                                            78042-1359 or if by email, ibcchairman@ibc.com. The Notice of Dispute must (a) describe the
                                            nature and basis of the claim or dispute; and (b) explain specifically what relief is sought.
                                            You may download a copy of the Notice of Dispute at www.ibc.com or you may obtain a copy
                                            from your account officer or branch manager.

 

		(c)	If
                                            the Dispute is not Informally Resolved. If you and the Lender do not reach an agreement
                                            to resolve the claim or dispute within thirty (30) days after the Notice of Dispute is received,
                                            you or the Lender may commence a binding arbitration proceeding. During the binding arbitration
                                            proceeding, any settlement offers made by you or the Lender shall not be disclosed to the
                                            Arbitrator.

 

		(d)	“DISPUTE(S)”.
                                            As used herein, the word “DISPUTE(S)” includes any and all controversies or claims
                                            between the PARTIES of whatever type or manner, including without limitation, any and all
                                            claims arising out of or relating to this Note, compliance with applicable laws and/or regulations,
                                            any and all services or products provided by the Lender, any and all past, present and/or
                                            future loans, lines of credit, letters of credit, credit facilities or other form of indebtedness
                                            and/or agreements involving the PARTIES, any and all transactions between or involving the
                                            PARTIES, and/or any and all aspects of any past or present relationship of the PARTIES, whether
                                            banking or otherwise, specifically including but not limited to any claim founded in contract,
                                            tort, fraud, fraudulent inducement, misrepresentation or otherwise, whether based on statute,
                                            regulation, common law or equity.

 

		(e)	“CONSUMER
                                            DISPUTE” and “BUSINESS DISPUTE”. As used herein, “CONSUMER
                                            DISPUTE” means a DISPUTE relating to an account (including a deposit account), agreement,
                                            extension of credit, loan, service or product provided by the Lender that is primarily for
                                            personal, family or household purposes. “BUSINESS DISPUTE” means any DISPUTE
                                            that is not a CONSUMER DISPUTE.

 

		(f)	“PARTIES”
                                            or “PARTY”. As used in these Arbitration Provisions, the term “PARTIES”
                                            or “PARTY” means Borrower, Lender, and each and all persons and entities signing
                                            this Note or any other agreements between or among any of the PARTIES as part of this transaction.
                                            “PARTIES” or “PARTY” shall be broadly construed and include individuals,
                                            beneficiaries, partners, limited partners, limited liability members, shareholders, subsidiaries,
                                            parent companies, affiliates, officers, directors, employees, heirs, agents and/or representatives
                                            of any party to such documents, any other person or entity claiming by or through one of
                                            the foregoing and/or any person or beneficiary who receives products or services from the
                                            Lender and shall include any other owner and holder of this Note. Throughout these Arbitration
                                            Provisions, the term “you” and “your” refer to Borrower, and the
                                            term “Arbitrator” refers to the individual arbitrator or panel of arbitrators,
                                            as the case may be, before which the DISPUTE is arbitrated.

 

    	Page 6 of 9

    	 

    

 

		(g)	BINDING
                                            ARBITRATION. The PARTIES agree that any DISPUTE between the PARTIES shall be resolved
                                            by mandatory binding arbitration pursuant to these Arbitration Provisions at the election
                                            of either PARTY. BY AGREEING TO RESOLVE A DISPUTE IN ARBITRATION, THE PARTIES ARE WAIVING
                                            THEIR RIGHT TO A JURY TRIAL OR TO LITIGATE IN COURT (except for matters that may be taken
                                            to small claims court for a CONSUMER DISPUTE as provided below).

 

		(h)	CLASS
                                            ACTION WAIVER. The PARTIES agree that (i) no arbitration proceeding hereunder whether
                                            a CONSUMER DISPUTE or a BUSINESS DISPUTE shall be certified as a class action or proceed
                                            as a class action, or on a basis involving claims brought in a purported representative capacity
                                            on behalf of the general public, other customers or potential customers or persons similarly
                                            situated, and (ii) no arbitration proceeding hereunder shall be consolidated with, or joined
                                            in any way with, any other arbitration proceeding. THE PARTIES AGREE TO ARBITRATE A CONSUMER
                                            DISPUTE OR BUSINESS DISPUTE ON AN INDIVIDUAL BASIS AND EACH WAIVES THE RIGHT TO PARTICIPATE
                                            IN A CLASS ACTION.

 

		(i)	FEDERAL
                                            ARBITRATION ACT AND TEXAS LAW. The PARTIES acknowledge that this Note evidences a transaction
                                            involving interstate commerce. The Federal Arbitration Act shall govern (i) the interpretation
                                            and enforcement of these Arbitration Provisions, and (ii) all arbitration proceedings that
                                            take place pursuant to these Arbitration Provisions. THE PARTIES AGREE THAT, EXCEPT AS OTHERWISE
                                            EXPRESSLY AGREED TO BY THE PARTIES IN WRITING, OR UNLESS EXPRESSLY PROHIBITED BY LAW, TEXAS
                                            SUBSTANTIVE LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) WILL APPLY IN ANY BINDING
                                            ARBITRATION PROCEEDING OR SMALL CLAIMS COURT ACTION REGARDLESS OF WHO INITIATES THE PROCEEDING,
                                            WHERE YOU RESIDE OR WHERE THE DISPUTE AROSE.

 

	II.	Provisions
                                            applicable only to a CONSUMER DISPUTE:

 

		(a)	Any
                                            and all CONSUMER DISPUTES shall be resolved by arbitration administered by the American Arbitration
                                            Association (“AAA”) under the Commercial Arbitration Rules and the Supplemental
                                            Procedures for Resolution of Consumer Disputes and Consumer Due Process Protocol (which are
                                            incorporated herein for all purposes). It is intended by the PARTIES that these Arbitration
                                            Provisions meet and include all fairness standards and principles of the American Arbitration
                                            Association’s Consumer Due Process Protocol and due process in predispose arbitration.
                                            If a CONSUMER DISPUTE is for a claim of actual damages above $250,000 it shall be administered
                                            by the AAA before three neutral arbitrators at the request of any PARTY.

 

		(b)	Instead
                                            of proceeding in arbitration, any PARTY hereto may pursue its claim in your local small claims
                                            court, if the CONSUMER DISPUTE meets the small claims court’s jurisdictional limits.
                                            If the small claims court option is chosen, the PARTY pursuing the claim must contact the
                                            small claims court directly. The PARTIES agree that the class action waiver provision also
                                            applies to any CONSUMER DISPUTE brought in small claims court.

 

		(c)	For
                                            any claim for actual damages that does not exceed $2,500, the Lender will pay all arbitration
                                            fees and costs provided you submitted a Notice of Dispute with regard to the CONSUMER DISPUTE
                                            prior to initiation of arbitration. For any claim for actual damages that does not exceed
                                            $5,000, the Lender also agrees to pay your reasonable attorney’s fees and reasonable
                                            expenses your attorney charges you in connection with the arbitration (even if the Arbitrator
                                            does not award those to you) plus an additional $2,500 if you obtain a favorable arbitration
                                            award for your actual damages which is greater than any written settlement offer for your
                                            actual damages made by the Lender to you prior to the selection of the Arbitrator.

 

		(d)	Under
                                            the AAA’s Supplemental Procedures for Consumer Disputes, if your claim for actual damages
                                            does not exceed $10,000, you shall only be responsible for paying up to a maximum of $125
                                            in arbitration fees and costs. If your claim for actual damages exceeds $10,000 but does
                                            not exceed $75,000, you shall only be responsible for paying up to a maximum of $375 in arbitration
                                            fees and costs. For any claim for actual damages that does not exceed $75,000, the Lender
                                            will pay all other arbitrator’s fees and costs imposed by the administrator of the
                                            arbitration. With regard to a CONSUMER DISPUTE for a claim of actual damages that exceeds
                                            $75,000, or if the claim is a non-monetary claim, the Lender agrees to pay all arbitration
                                            fees and costs you would otherwise be responsible for that exceed $1,000. The fees and costs
                                            stated above are subject to any amendments to the fee and cost schedules of the AAA. The
                                            fee and cost schedule in effect at the time you submit your claim shall apply. The AAA rules
                                            also permit you to request a waiver or deferral of the administrative fees and costs of arbitration
                                            if paying them would cause you financial hardship.

 

		(e)	Although
                                            under some laws, the Lender may have a right to an award of attorney’s fees and expenses
                                            if it prevails in arbitration, the Lender agrees that it will not seek such an award in a
                                            binding arbitration proceeding with regard to a CONSUMER DISPUTE for a claim of actual damages
                                            that does not exceed $75,000.

 

		(f)	To
                                            request information on how to submit an arbitration claim, or to request a copy of the AAA
                                            rules or fee schedule, you may contact the AAA at 1-800-778-7879 (toll free) or at www.adr.org.

 

	III.	Provisions
                                            applicable only to a BUSINESS DISPUTE:

 

		(a)	Any
                                            and all BUSINESS DISPUTES between the PARTIES shall be resolved by arbitration in accordance
                                            with the Commercial Arbitration Rules of the AAA in effect at the time of filing, as modified
                                            by, and subject to, these Arbitration Provisions. A BUSINESS DISPUTE for a claim of actual
                                            damages that exceeds $250,000 shall be administered by AAA before at least three (3) neutral
                                            arbitrators at the request of any PARTY. In the event the aggregate of all affirmative claims
                                            asserted exceeds $500,000, exclusive of interest and attorney’s fees, or upon the written
                                            request of any PARTY, the arbitration shall be conducted under the AAA Procedures for Large,
                                            Complex Commercial Disputes. If the payment of arbitration fees and costs will cause you
                                            extreme financial hardship you may request that AAA defer or reduce the administrative fees
                                            or request the Lender to cover some of the arbitration fees and costs that would be your
                                            responsibility.

 

    	Page 7 of 9

    	 

    

 

		(b)	The
                                            PARTIES shall have the right to (i) invoke self-help remedies (such as setoff, notification
                                            of account debtors, seizure and/or foreclosure of collateral, and nonjudicial sale of personal
                                            property and real property collateral) before, during or after any arbitration, and/or (ii)
                                            request ancillary or provisional judicial remedies (Such as garnishment, attachment, specific
                                            performance, receiver, injunction or restraining order, and sequestration) before or after
                                            the commencement of any arbitration proceeding (individually, and not on behalf of a class).
                                            The PARTIES need not await the outcome of the arbitration proceeding before using self-help
                                            remedies. Use of self-help or ancillary and/or provisional judicial remedies shall not operate
                                            as a waiver of either PARTY’s right to compel arbitration. Any ancillary or provisional
                                            judicial remedy which would be available from a court at law shall be available from the
                                            Arbitrator. The PARTIES agree that the AAA Optional Rules for Emergency Measures of Protection
                                            shall apply in an arbitration proceeding where emergency interim relief is requested.

 

		(c)	Except
                                            to the extent the recovery of any type or types of damages or penalties may not by waived
                                            under applicable law, the Arbitrator shall not have the authority to award either PARTY (i)
                                            punitive, exemplary, special or indirect damages, (ii) statutory multiple damages, or (iii)
                                            penalties, statutory or otherwise.

 

		(d)	The
                                            Arbitrator may award attorney’s fees and costs including the fees, costs and expenses
                                            of arbitration and of the Arbitrator as the Arbitrator deems appropriate to the prevailing
                                            PARTY. The Arbitrator shall retain jurisdiction over questions of attorney’s fees for
                                            fourteen (14) days after entry of the decision.

 

	IV.	General
                                            provisions applicable to both CONSUMER DISPUTES and BUSINESS DISPUTES:

 

		(a)	The
                                            Arbitrator is bound by the terms of these Arbitration Provisions. The Arbitrator shall have
                                            exclusive authority to resolve any DISPUTES relating to the scope or enforceability of these
                                            Arbitration Provisions, including (i) all arbitrability questions, and (ii) any claim that
                                            all or a part of these Arbitration Provisions are void or voidable (including any claims
                                            that they are unconscionable in whole or in part).

 

		(b)	These
                                            Arbitration Provisions shall survive any modification, renewal, extension, repayment (whether
                                            partial or full), or discharge (whether partial or full) of this Note, unless all of the
                                            PARTIES otherwise expressly agree in writing.

 

		(c)	If
                                            a PARTY initiates legal proceedings, the failure of the initiating PARTY to request arbitration
                                            pursuant to these Arbitration Provisions within 180 days after the filing of the lawsuit
                                            shall be deemed a waiver of the initiating PARTY’S right to compel arbitration with
                                            respect to the claims asserted in the litigation. The failure of the defending PARTY in such
                                            litigation to request arbitration pursuant to these Arbitration Provisions within 180 days
                                            after the defending PARTY’S receipt of service of judicial process, shall be deemed
                                            a waiver of the right of the defending PARTY to compel arbitration with respect to the claims
                                            asserted in the litigation. If a counterclaim, cross-claim or third party action is filed
                                            and properly served on a PARTY in connection with such litigation, the failure of such PARTY
                                            to request arbitration pursuant to these Arbitration Provisions within ninety (90) days after
                                            such PARTY’S receipt of service of the counterclaim, crossclaim or third-party claim
                                            shall be deemed a waiver of such PARTY’S right to compel arbitration with respect to
                                            the claims asserted therein. The issue of waiver pursuant to these Arbitration Provisions
                                            is an arbitrable dispute. Active participation in any pending litigation described above
                                            by a PARTY shall not in any event be deemed a waiver of such PARTY’S right to compel
                                            arbitration. All discovery obtained in the pending litigation may be used in any subsequent
                                            arbitration proceeding.

 

		(d)	Any
                                            PARTY seeking to arbitrate shall serve a written notice of intent to any and all opposing
                                            PARTIES after a DISPUTE has arisen. The PARTIES agree a timely written notice of intent to
                                            arbitrate by either PARTY pursuant to these Arbitration Provisions shall stay and/or abate
                                            any and all action in a trial court, save and except a hearing on a motion to compel arbitration
                                            and/or the entry of an order compelling arbitration and staying and/or abating the litigation
                                            pending the filing of the final award of the Arbitrator.

 

		(e)	Any
                                            Arbitrator selected shall be knowledgeable in the subject matter of the DISPUTE and be licensed
                                            to practice law.

 

		(f)	For
                                            a one (1) member arbitration panel, the PARTIES are limited to an equal number of strikes
                                            in selecting the arbitrator from the AAA neutral list, such that at least one arbitrator
                                            remains after the PARTIES exercise all of their respective strikes. For a three (3) member
                                            arbitration panel, the PARTIES are limited to an equal number of strikes in selecting the
                                            arbitrators from the AAA neutral list, such that at least three arbitrators remain after
                                            the PARTIES exercise all of their respective strikes. After exercising all of their allotted
                                            respective strikes, the PARTIES shall rank those potential arbitrators remaining numerically
                                            in order of preference (with “1” designating the most preferred). The AAA shall
                                            review the PARTIES rankings and assign a score to each potential arbitrator by adding together
                                            the ranking given to such potential arbitrator by each PARTY. The arbitrator(s) with the
                                            lowest score total(s) will be selected. In the event of a tie or ties for lowest score total
                                            and if the selection of both or all of such potential arbitrators is not possible due to
                                            the required panel size, the AAA shall select the arbitrator(s) it believes to be best qualified.

 

		(g)	The
                                            PARTIES and the Arbitrator shall treat all aspects of the arbitration proceedings, including,
                                            without limitation, any documents exchanged, testimony and other evidence, briefs and the
                                            award, as strictly confidential; provided, however, that a written award or order from the
                                            Arbitrator may be filed with any court having jurisdiction to confirm and/or enforce such
                                            award or order.

 

		(h)	Any
                                            statute of limitation which would otherwise be applicable shall apply to any claim asserted
                                            in any arbitration proceeding under these Arbitration Provisions, and the commencement of
                                            any arbitration proceeding tolls such statute of limitations.

 

		(i)	If
                                            the AAA is unable for any reason to provide arbitration services, then the PARTIES agree
                                            to select another arbitration service provider that has the ability to arbitrate the DISPUTE
                                            pursuant to and consistent with these Arbitration Provisions. If the PARTIES are unable to
                                            agree on another arbitration service provider, any PARTY may petition a court of competent
                                            jurisdiction to appoint an Arbitrator to administer the arbitration proceeding pursuant to
                                            and consistent with these Arbitration Provisions.

 

		(j)	The
                                            award of the Arbitrator shall be final and Judgment upon any such award may be entered in
                                            any court of competent jurisdiction. The arbitration award shall be in the form of a written
                                            reasoned decision and shall be based on and consistent with applicable law.

 

    	Page 8 of 9

    	 

    

 

 

		(k)	Unless
                                            the PARTIES mutually agree to hold the binding arbitration proceeding elsewhere, venue of
                                            any arbitration proceeding under these Arbitration Provisions shall be in the county and
                                            state where Lender is located, which is Lender’s address set out in the first paragraph
                                            on page 1 hereof.

 

		(l)	If
                                            any of these Arbitration Provisions are held to be invalid or unenforceable, the remaining
                                            provisions shall be enforced without regard to the invalid or unenforceable term or provision.

 

JURY
WAIVER: IF A DISPUTE BETWEEN YOU AND LENDER PROCEEDS IN COURT RATHER THAN THROUGH MANDATORY BINDING ARBITRATION, THEN YOU AND LENDER
BOTH WAIVE THE RIGHT TO A JURY TRIAL, AND SUCH DISPUTE WILL BE TRIED BEFORE A JUDGE ONLY.

 

THE
TERM LENDER INCLUDES ANY OTHER OWNER AND HOLDER OF THIS NOTE AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. THIS NOTE IS GOVERNED BY OKLAHOMA
LAW, EXCEPT TO THE EXTENT THE USURY LAWS OF THE STATE OF OKLAHOMA ARE PRE-EMPTED BY FEDERAL LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL
APPLY. VENUE OF ALL ACTIONS ON THIS NOTE, SHALL LIE IN OKLAHOMA COUNTY, OKLAHOMA, AND ALL OBLIGATIONS REQUIRED HEREIN ARE PERFORMABLE
IN OKLAHOMA COUNTY, OKLAHOMA.

 

This
Note has been accepted by Lender in the State where Lender is located as set forth in the first paragraph of page 1 hereof.

 

Please
notify us if we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing
the specific inaccuracy(ies) should be sent to us at the following address: International Bank of Commerce, 3817 NW Expressway, Suite
100, Oklahoma City, Oklahoma 73112, ATTN: William P. Schonacher.

 

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

 

BORROWER
ACKNOWLEDGES EXECUTION OF THIS NOTE, AND HAVING READ AND UNDERSTOOD ALL OF ITS PROVISIONS, BORROWER AGREES TO ITS TERMS.

 

NO
ORAL AGREEMENTS

 

THIS
WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

	BORROWER(S):	 
	 	 
	Greystone
    Logistics, Inc. An Oklahoma Corporation	 
	 	 	 
	By:	/s/
    Warren F. Kruger 	 
	Name:	Warren
    F. Kruger	 
	Title:	President	 

 

	Address:	1613
    East 15th
	 	Tulsa,
    Oklahoma 74120

 

	Greystone
    Manufacturing, L.L.C.	 
	An
    Oklahoma Limited Liability Company	 
	 	 	 
	By:	/s/
    Warren F. Kruger	 
	Name:	Warren
    F. Kruger	 
	Title:	Manager	 

 

	Address:	1613
    East 15th Street
	 	Tulsa, Oklahoma 74120

 

    	Page 9 of 9Exhibit 10.3

electroCore, Inc. Executive Severance Policy

ARTICLE I.
PURPOSE

The electroCore, Inc. Executive Severance Policy (“the Policy”) is established to provide eligible executives of electoCore, Inc. or any of its wholly-owned subsidiaries (collectively, the “Company”) who incur an Involuntary Termination of Employment (as defined below) with severance pay and other benefits in accordance with and subject to the terms and conditions set forth in this Policy. 

This Policy is intended to be an unfunded employee benefit plan maintained for a select group of management or highly compensated employees for purposes of the Employee Retirement Income Security Act of 1974, as amended.  All previous existing pay plans, programs, agreements and practices that provide for the payment of severance benefits, whether formal or informal (each a “Prior Severance Plan”), are hereby revoked and terminated for any Participant (as defined below).  This document applies to Participants who incur an Involuntary Termination of Employment on and after of the Effective Date of this Policy.  The payment of severance benefits, if any, payable to any executive who incurred a Termination of Employment prior to the Effective Date of this Policy shall be determined in accordance with the terms of the Prior Severance Plan, applicable to such individual at the time of his Termination of Employment.

ARTICLE II.
DEFINITIONS

When used in this Policy, the following words shall have the following meaning unless the context clearly indicates otherwise.

Section 2.01            “Accrued Obligations” means the sum of (i) the Participant's unpaid base salary earned through the date of his Termination of Employment, (ii) any reimbursable business expenses incurred prior to the Participant’s Termination of Employment, (iii) any earned but unpaid vacation pay as of the Participant’s Termination of Employment and (iv) any vested benefits to which the Participant is entitled under any benefit plan, program or arrangement maintained by the Company.  

Section 2.02            “Administrator” shall be the Committee.

Section 2.03          “Base Annual Compensation” means (a) with respect to the CEO, the sum of the Participant’s gross annual base salary and target annual incentive bonus, and (b) with respect to all other Participants, such Participant’s gross annual base salary, in each case as in effect immediately prior to the Participant’s Termination of Employment or as in effect immediately prior to any reduction in the Participant’s Base Annual Compensation that results in the Participant’s Termination of Employment for Good Reason. 

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Section 2.04            “Board” means the board of directors of electroCore, Inc.

Section 2.05            “Cause” means any of the following:

(a)     the Participant’s willful failure to fulfill, in any material respect, his duties and responsibilities to the Company (other than by reason of death, illness or disability);

(b)     The Participant’s willful misconduct, gross negligence or willful acts of personal dishonesty in the performance of his duties to the Company that directly, materially and demonstrably impairs or damages the property, goodwill, reputation, business or finances of the Company; 

(c)     The conviction of, or plea of nolo contendere by, the Participant to, a felony or a crime involving moral turpitude that materially and demonstrably impairs or damages the property, goodwill, reputation, business or finances of the Company;

(d)     The Participant’s commission of fraud or embezzlement against the Company;

(e)     the Participant’s willful or intentional violation of any lawful policy of the Company that directly, materially and demonstrably impairs or damages the property, goodwill, reputation, business or finances of the Company; or

(f)     the Participant’s breach of the terms of the Restrictive Covenant Agreement. 

Notwithstanding the foregoing, no failure or violation described in (a), (b) or (e) above shall constitute Cause unless (i) the Administrator provides the Participant with a written notice describing the Participant’s acts or omissions that constitute a failure or violation described in (a), (b) or (e) above, (ii) the Participant fails to cure such failure or violation within 10 business days after he receives such written notice and (iii) following the expiration of the cure period, the Company terminates the Participant’s employment due to such failure or violation; provided, however, that if the Administrator determines that the failure or violation described in (a), (b) or (e) is not capable of being cured, the Company may terminate the Participant’s employment for Cause at any time after the Administrator provides the written notice described in (i) above.

Section 2.06            “CEO” means the Chief Executive Officer of electroCore, Inc. 

Section 2.07            “Change in Control” means either:

(a)              the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: 

                                         (i)        any person (or group of persons acting together) other than Core Ventures II, LLC and its managing members becomes the owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding voting securities other than by virtue of a merger, consolidation or similar transaction; provided, however, that a Change in Control under this clause (i) shall not occur solely as a result of any redemption, repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding;

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                                 (ii)        any person (or group of persons acting together) other than Core Ventures II, LLC and its managing members acquires (or has acquired within any 12-month period ending on the date of the most recent acquisition by such person or group) ownership, directly or indirectly, of securities of the Company representing more than 30% of the combined voting power of the Company’s then outstanding voting securities other than by virtue of a merger, consolidation or similar transaction;

                                      (iii)        the consummation of a merger, consolidation or similar transaction involving (directly or indirectly) the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of any direct or indirect parent of the surviving entity in such merger, consolidation or similar transaction; or

                                       (iv)        the acquisition by a person (or a group of persons acting together) other than Core Ventures II, LLC and its managing members during the 12-month period ending on the date of the most recent acquisition by such person or group of assets from the Company that have a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.

Notwithstanding the foregoing, no transaction or series of related transactions shall constitute a Change in Control of the Company unless such transaction or series of related transactions qualify as a change in ownership of the Company, a change in effective control of the Company or a change in ownership of a substantial portion of the Company’s assets as each of these terms are defined in Treasury Regulation Section 1.409A-3(i)(5).

Section 2.08            “COBRA” means the provisions regarding healthcare continuation coverage set forth in Section 601 et seq. of ERISA and Section 4980B of the Code. 

Section 2.09            “COBRA Premium” means the monthly cost of providing healthcare continuation coverage for a qualified beneficiary under COBRA, as adjusted from time to time.

Section 2.10            “Code” means the Internal Revenue Code of 1986, as amended.

Section 2.11            “Committee” means the compensation committee of the Board.

Section 2.12            “Company” means electroCore, Inc., its wholly-owned subsidiaries and its successors and assigns.

Section 2.13            Reserved. 

Section 2.14            “Eligible Participant” means a Participant who satisfies the eligibility conditions set forth in Section 3.01 for receiving Severance Benefits under this Policy.

Section 2.15            “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

Section 2.16            “Excess Parachute Tax” means the taxes, if any, imposed under Section 4999 of the Code on a Participant with respect to all or a portion of his Total Parachute Payments as a result of a Change in ownership or effective control of the Company (within the meaning of Section 280G of the Code).

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Section 2.17            “Good Reason” means 

(a)        Any material reduction in the Participant's Base Annual Compensation prior to a Change in Control; provided, however, that a reduction in the Participant’s Annual Base Compensation under this paragraph (a) shall not constitute Good Reason if the Company reduces the Annual Base Compensation of all Participants on a substantially equivalent basis;

(b)          any material reduction in the Participant's Base Annual Compensation during the period commencing on or after a Change in Control and ending on the second anniversary of a Change in Control;

(c)        any material diminution in the Participant’s authority, duties, offices, title or responsibilities; or

(d)         a transfer of Participant’s principal place of employment to a location that is more than 30 miles from the Participant’s then current principal place of employment.

A Participant will not have Good Reason to terminate his employment and receive Severance Benefits under this Policy unless the Participant provides the Administrator with written notice of the circumstances he believes constitutes Good Reason within 30 days after the occurrence of such circumstances, or, if later, within 30 days after the Participant in the exercise of ordinary care first becomes aware of any such circumstances.  If the Participant does not provide such written notice within this time period, he may not assert those circumstances as a basis for any Termination of Employment for Good Reason.  If Company does not cure any claimed event of Good Reason within 30 days after receipt of such written notice from the Participant, the Participant may terminate his employment for Good Reason within 60 days after the expiration of such cure period.  If the Participant terminates his employment prior to the expiration of the 30-day cure period or more than 60 days after the expiration of such cure period, the Participant will not be treated as having terminated his employment for Good Reason.  

Section 2.18            “Involuntary Termination of Employment” means a Participant’s Termination of Employment (i) by the Company for any reason other than for Cause or (ii) by the Participant for Good Reason.  Notwithstanding the foregoing, however, an Involuntary Termination of Employment shall not include a termination of a Participant’s employment due to: 

(a)              the Participant’s death, total and permanent disability or his voluntary resignation or retirement (other than for Good Reason); or

(b)             the sale or other disposition of any subsidiary, division or business unit of the Company or the outsourcing of any operations of the Company if the Participant receives a written offer of comparable employment from the purchaser of such subsidiary, division or business unit or from the entity that acquires the outsourced operations or from any direct or indirect parent, subsidiary or affiliate of such purchaser or entity (a “Successor Employer”) whether or not the Participant accepts such offer of comparable employment.  

An offer of employment from a Successor Employer will not be considered to be an offer of “comparable employment” for purposes of (b) unless all of the following conditions are satisfied: (i) the Participant is offered Base Annual Compensation in an amount equal to or exceeding 100% of the Participant’s Base Annual Compensation immediately prior to the consummation of such transaction, (ii) the Participant is offered employment by the Successor Employer at a principal place of employment that is located not more than 30 miles from the Participant’s principal place of employment with the Company immediately prior to the consummation of such transaction and (iii) the Successor Employer offers the Participant employment in a position that is not expected to result in a material diminution in the authority, duties or responsibilities the Participant held immediately prior to his Termination of Employment, regardless of his title or position with the Successor Employer.

Section 2.19            “Participant” means the CEO, and each other member of the Company’s senior management team who is designated (by name or by job title or description) as a Participant hereunder by the Committee. 

Section 2.20            “Release” means a general release of a Participant’s claims against the Company, its subsidiaries, affiliates, predecessors, and successor, and their respective agents, officers, directors, employees and stockholders in a form provided by the Administrator in good faith.

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Section 2.21            “Restrictive Covenants Agreement” means the Employee Confidentiality and Assignment Agreement or similar agreement imposing employment covenants on the Participant in favor of the Company.

Section 2.22            “Severance Benefits” means the Severance Pay and other benefits payable to an Eligible Participant pursuant to Article IV of this Policy.

Section 2.23            “Severance Pay” means the cash payments made to an Eligible Participant pursuant to Section 4.01 of this Policy. 

Section 2.24            “Severance Period” means the period commencing on the first day following an Eligible Participant’s Involuntary Termination of Employment and continuing for a period equal to: 

(a)              If the Eligible Participant’s Involuntary Termination of Employment occurs prior to a Change in Control or on or after the second anniversary of a Change in Control, the number of months set forth in the applicable table below based on the Eligible Participant’s employment position at the time of his Involuntary Termination of Employment or his employment position immediately prior to any change in his employment position that results in the Participant’s Termination of Employment for Good Reason:

	
Employment Position

	
Severance Period

	
CEO :

	
12 months

	
All Other Participants:

	
6 months

(b)             If an Eligible Participant’s Involuntary Termination of Employment occurs on or after a Change in Control and prior to the second anniversary of such Change in Control, the number of months set forth in the applicable table below based on the Eligible Participant’s employment position at the time of his Involuntary Termination of Employment or his position immediately prior to any change in his employment position that results in his Termination of Employment for Good Reason:

	
Employment Position

	
Severance Period

	
CEO:

	
18 months

	
All Other Participants:

	
12 months

Section 2.25            “Termination of Employment” or words to similar effect means the Participant’s separation from service (as defined in regulations under Section 409A of the Code) with the Company (and each entity that together with the Company is required to be treated as a single service recipient for purposes of determining whether a separation from service has occurred for purposes of Section 409A of the Code). 

Section 2.26            “Total Parachute Payments” shall mean any payment or benefit in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) paid or provided to or for the benefit of a Participant (whether paid or provided pursuant to this Policy or otherwise) which is conditioned on a Change in ownership or effective control of the Company (within the meaning of Section 280G of the Code) and would subject the Eligible Participant in whole or in part to an Excess Parachute Tax.

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ARTICLE III.
ELIGIBILITY FOR SEVERANCE BENEFITS

Section 3.01            Eligibility for Severance Benefits.  A Participant will become an Eligible Participant who is entitled to receive Severance Benefits under this Policy if such Participant

(a)           incurs an Involuntary Termination of Employment, 

(b)             timely executes a Release within 60 days following such Involuntary Termination of Employment (or within such shorter time frame as may be specified in the Release provided by the Administrator), and 

(c)        does not revoke such Release within the applicable revocation period provided under applicable law for revocation of a release of employment-based claims (including, without limitation, the release of claims under the Age Discrimination in Employment Act).  

A Participant who does not return a signed copy of the Release to the Company within the time frame specified above or who revokes a signed Release within the applicable revocation period, will not be eligible to receive any Severance Benefits under this Policy.  The Company will provide a Participant who has an Involuntary Termination of Employment with an executable form of Release no later than five business days after the Participant’s Involuntary Termination of Employment.  

ARTICLE IV.
SEVERANCE BENEFITS

An Eligible Participant who satisfies the eligibility requirements set forth in Section 3.01 will receive Severance Pay and other Severance Benefits as provided in this Article IV, in addition to the payment of any Accrued Obligations to which the Eligible Participant is entitled.

Section 4.01            Severance Pay.

(a)              Amount of Severance Pay.  

                                         (i)        Normal Severance.  Except as provided in clause (ii) below, an Eligible Participant will receive Severance Pay in an amount equal to his Base Annual Compensation times the applicable severance multiple specified in the table below based on the Eligible Participant’s employment position at the time of his Involuntary Termination of Employment or his employment position immediately prior to any change in his employment position that results in his Termination of Employment for Good Reason:

	
Employment Position

	
Severance Multiple

	
CEO :

	
1.0

	
All Other Participants:

	
0.5

 

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                                        (ii)        Change in Control Severance.  If an Eligible Participant’s Involuntary Termination of Employment occurs on or after a Change in Control and prior to the second anniversary of such Change in Control, he will receive Severance Pay in an amount equal to his Base Annual Compensation times the applicable severance multiple specified in the table below based on the Eligible Participant’s employment position at the time of his Involuntary Termination of Employment or his employment position immediately prior to any change in his employment position that results in his Termination of Employment for Good Reason:

	
Employment Position

	
Severance Multiple

	
CEO:

	
1.5

	
All Other Participants:

	
1.0

 

(b)             Timing of Severance Pay.  

                                         (i)        Normal Severance.  Except as provided in clause (ii) below (and subject to Section 4.04), an Eligible Participant will receive his Severance Pay in equal installments over the Participant’s Severance Period in accordance with the Company’s regular payroll schedule; provided, however, that no installment will be paid to a Participant unless and until the Participant has satisfied all of the eligibility conditions in Section 3.01.

                                        (ii)        Change in Control Severance.  If an Eligible Participant’s Involuntary Termination of Employment occurs on or after a Change in Control but prior to the second anniversary of such Change in Control, the Eligible Participant’s Severance Pay will be paid in a single lump sum as soon as practicable after the Participant has satisfied all of the eligibility conditions in Section 3.01. 

Section 4.02            Medical, Dental and Vision Coverage.  If an Eligible Participant is entitled to file, and does timely file, an election to continue any health benefits for himself, his spouse and his eligible dependents, if any, under a medical, dental and/or vision benefit program maintained by the Company in accordance with the provisions of COBRA, the Company shall promptly reimburse the Eligible Participant for the monthly COBRA Premiums paid by the Eligible Participant for such COBRA coverage until the earlier of (i) the expiration of the Eligible Participant’s continuation coverage under COBRA or (ii) the end of the Participant’s Severance Period.  Notwithstanding the foregoing, an Eligible Participant shall not receive any reimbursement of COBRA Premiums unless and until all of the eligibility conditions in Section 3.01 have been satisfied.  The Eligible Participant is responsible for the payment of all applicable COBRA Premiums.

Section 4.03            Acceleration of Vesting of Equity.  If a Participant’s Involuntary Termination of Employment occurs on or after a Change in Control and prior to the second anniversary of a Change in Control, all outstanding forms of equity-based compensation granted to such Participant that remains outstanding immediately prior to the Participant’s Involuntary Termination of Employment shall vest and become exercisable upon satisfaction of all of the eligibility conditions in Section 3.01, and the period of time during which the Eligible Participant may exercise outstanding stock options or outstanding stock appreciation rights shall be extended until the earlier of (a) 150 days following the Participant’s Termination of Employment (or, if later, the period of time set forth in the applicable award agreement for exercising such stock options or stock appreciation rights) or (b) the original expiration date for such stock options.  Such equity awards shall otherwise settle in accordance with their terms and conditions. 

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Section 4.04            Compliance with Section 409A of the Code.  The Severance Benefits provided under this Policy are, to the fullest extent possible, intended to be exempt from the requirements of Section 409A of the Code and to the extent that any Severance Benefits provided hereunder are not exempt from Section 409A of the Code, they is intended to comply with the requirements of Section 409A of the Code and the regulations thereunder, and this Policy shall be construed accordingly.  Notwithstanding any provision in this Policy to the contrary, if at the time of an Eligible Participant’s Termination of Employment, the Administrator determines that the Eligible Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code and applicable regulations thereunder, then, to the extent that such Severance Benefits constitute deferred compensation within the meaning of Section 409A of the Code and applicable regulations issued thereunder, payment or provision of such Severance Benefits shall be suspended and shall not be paid or provided to the Eligible Participant until the date that occurs on the earlier of (i) the first day of the seventh month following the Eligible Participant’s Termination of Employment or (ii) the Eligible Participant’s death.  The payments suspended pursuant to this Section 4.04 will be paid to the Eligible Participant as soon as practicable after the period of suspension ends.  Notwithstanding any provision in this Policy to the contrary, if any Severance Benefits are to be paid or provided in installments, each such installment shall constitute a separate payment for purposes of Section 409A of the Code and the regulations thereunder. 

Section 4.05            Excess Parachute Tax.  Notwithstanding any other provisions of this Policy or any plan, arrangement or agreement maintained by the Company, if a Participant receives or is entitled to receive any Total Parachute Payments under the terms of this Policy or otherwise that would subject the Participant to an Excess Parachute Tax as a result of a change in ownership or effective control of the Company (within the meaning of Section 280G of the Code), the portion of the Total Parachute Payments payable to the Participant (whether under this Policy or otherwise) shall be reduced to the extent necessary to prevent the imposition of the Excess Parachute Tax but only if the amount determined under (a) below exceeds the amount determined under (b) below, where:

(a)              is the net after-tax amount of the Total Parachute Payments remaining after (i) reducing the Total Parachute Payments to the extent necessary to prevent the imposition of the Excess Parachute Tax and (ii) deducting the net amount of Federal, state, and local income and payroll taxes payable by the Participant with respect such reduced Total Parachute Payments computed at the Participant’s highest marginal tax rates; and

(b)             is the net after-tax amount of the Total Parachute Payments (without any reduction to prevent imposition of the Excess Parachute Tax) but after deducting the net amount of Federal, state, and local income and payroll taxes payable by the Participant with respect to such Total Parachute Payments computed at the Participant’s highest marginal tax rates and further reduced by the amount of the Excess Parachute Tax that would be imposed on the Participant with respect to such Total Parachute Payments.  

Such reduction shall first be applied to the accelerated vesting of any equity-based compensation, starting with stock options and stock appreciation rights that have the highest exercise or strike price, followed by any equity-based compensation that does not constitute nonqualified deferred compensation within the meaning of Section 409A of the Code and next followed by any Severance Pay under this Policy that is not considered to be deferred compensation within the meaning of Section 409A of the Code and lastly to any Severance Pay that is considered to be deferred compensation within the meaning of Section 409A of the Code (starting with the installment payments that are payable latest in time).

Section 4.06            Death of an Eligible Participant.  If an Eligible Participant dies after having satisfied all of the eligibility conditions set forth in Section 3.01 and before the end of the Severance Period, any remaining Severance Pay will continue to be paid to the beneficiary designated by the Participant to the Company, in writing.  If a Participant has not designated a beneficiary (or if the beneficiary does not survive the Participant), the remaining Severance Pay, if any, will be paid to the Eligible Participant’s estate.

Section 4.07            Violation of Post-Employment Obligations and Covenants.  Notwithstanding any provision in this Policy to the contrary, if any Eligible Participant breaches the terms of Restricted Covenant Agreement with the Company, such Eligible Employee shall immediately forfeit any and all rights he may have to any unpaid Severance Benefits hereunder and such Eligible Participant shall return to the Company any Severance Benefits previously received by the Eligible Participant.

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ARTICLE V.
POLICY ADMINISTRATION

This Policy shall be administered by the Administrator.  The Administrator shall have the discretionary authority to determine eligibility for Severance Benefits under the Policy and to construe the terms of the Policy, including the making of factual determinations.  Benefits under the Policy shall be paid or provided only if the Administrator determines that Participant is entitled to such benefits under the terms of this Policy.  The decisions of the Administrator shall be final and conclusive with respect to all questions concerning administration of the Policy.  The Administrator may delegate all or a portion of its duties under this Policy to the CEO; provided, however, that the Committee’s express approval is required for the payment of any compensation or benefits as a result of any Participant’s Termination of Employment that are not Accrued Obligations or otherwise authorized under this Policy and further provided that the Administrator shall not delegate any duties to the CEO in connection with his own Termination of Employment.  The actions of the CEO with respect to his delegated duties shall be treated as if such actions were taken by the Administrator.

ARTICLE VI.
CLAIMS PROCEDURE; ARBITRATION

Section 6.01            Filing a Claim.  No formal claim for benefits shall be required for Severance Benefits to be paid or provided under this Policy.  The Administrator will inform any Participant who incurs an Involuntary Termination of Employment that such Participant will be eligible for Severance Benefits under this Policy if the Participant satisfies the conditions set forth in Section 3.01.  However, any individual who believes he is eligible for Severance Benefits under this Policy that have not been provided (a “Claimant”) may submit a written claim (“Claim”) for Severance Benefits to the Administrator.  A Claimant shall have no right to seek review of a denial of Severance Benefits, or to bring any action in any court to enforce a Claim, prior to filing a Claim and exhausting his administrative remedies under this Article VI.

When a Claim has been filed properly, the Administrator shall evaluate it and shall notify the Claimant of the approval or the denial of the Claim within 90 days after the Administrator receives such Claim unless special circumstances require an extension of time for processing the Claim.  If such an extension of time for processing is required, the Administrator shall furnish the Claimant with written notice of the extension prior to the termination of the initial 90-day period.  The notice of extension will specify the special circumstances requiring an extension and the date by which a final decision will be reached.  The extension may not exceed 180 days after the date on which the Claim was filed.  The Administrator shall provide the Claimant with a written notice advising the Claimant as to whether the Claim is granted or denied, in whole or in part.  If a Claim is denied, in whole or in part, the notice will contain (a) the specific reasons for the denial, (b) references to pertinent provisions of the Policy upon which the denial is based, (c) a description of any additional material or information, if any, that is necessary to perfect the Claim and an explanation of why such material or information is necessary, and (d) the Claimant’s right to seek review of the denial.

Section 6.02            Review of Claim Denial.  If a Claim is denied, in whole or in part, the Claimant may shall have the right to (a) request that the Committee review the denial, (b) review pertinent documents, and (c) submit issues and comments in writing, provided that the Claimant files a written request for review with the Committee within 60 days after the date on which the Claimant received written notification of the denial.  Within 60 days after a request for review is received, the Committee shall review the Claim and advise the Claimant in writing of the Committee’s decision on review.  If special circumstances require an extension of time for processing the review, the Committee shall provide the Claimant with written notice within the initial 60-day review period specifying the reasons for the extension and when such review shall be completed.  The extension of the review period may not exceed 120 days after the date on which the request for review was filed.  The Committee shall notify the Claimant of its decision on review in writing, which will include specific reasons for the decision and reference to the provisions of the Policy upon which the decision is based.  A decision on review shall be final and binding on all persons for all purposes.  A Claimant or other individual shall not be entitled to bring any legal action or arbitration unless such person has exhausted such person’s rights under Section 6.01 and this Section 6.02 by timely submitting a Claim and requesting a review of a decision with respect to such Claim.

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Section 6.03            Arbitration.  If a Claimant has exhausted his or her administrative remedies under Section 6.02 relating to any Claim under this Policy, then the Claimant may demand that any remaining disputed matters under this Policy (a “Dispute”) be settled by final and binding arbitration by sending written notice of such election to the Administrator clearly marked “Arbitration Demand” and such Dispute shall be arbitrated in accordance with the terms and conditions of this Section 6.03. Notwithstanding the foregoing, either party may apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm or to enforce the terms of a Participant’s Restrictive Covenants Agreement.

The Dispute shall be resolved by a single arbitrator in an arbitration administered by the American Arbitration Association (“AAA”) in accordance with its Employment Arbitration Rules in effect at the time of the arbitration hearing and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  The decision of the arbitrator shall be final and binding on the parties, and specific performance giving effect to the decision of the arbitrator may be ordered by any court of competent jurisdiction. Nothing contained herein shall operate to prevent either party from asserting any counterclaims in any arbitration commenced in accordance with this Agreement.

The arbitration shall be filed with the AAA office located in the State of New Jersey.  The decision of the arbitrator, which shall be in writing and state the findings, the facts and conclusions of law upon which the decision is based, shall be final and binding upon the parties, who shall forthwith comply after receipt thereof.  Judgment upon the award rendered by the arbitrator may be entered by any competent court.  Each party submits itself to the jurisdiction of any such court, but only for the entry and enforcement to judgment with respect to the decision of the arbitrator hereunder.

Except as otherwise provided by law, the parties shall bear their own costs in preparing for and participating in the resolution of any Dispute pursuant to this Section 6.03, and the costs of the arbitrator(s) shall be equally divided between the parties.

The provisions of this Section 6.03 shall be a complete defense to any suit, action or proceeding instituted in any federal, state or local court or before any administrative tribunal with respect to any Dispute arising in connection with this Agreement. Any party commencing a lawsuit in violation of this Section 6.03 shall pay the costs of the other party, including, without limitation, reasonable attorney’s fees and defense costs.

ARTICLE VII.
AMENDMENT AND TERMINATION

The Board or the Committee reserves the right to amend this Policy from time to time or to terminate the Policy; provided, however, that no such amendment or termination shall reduce the amount of Severance Benefits payable to any Eligible Participant who had an Involuntary Termination of Employment on or before the date of such amendment is executed or this Policy is terminated.  Moreover, this Policy may not be amended or terminated at any time on or after the date Change in Control occurs and prior to the second anniversary of such Change in Control if such amendment or termination will have a material adverse affect on any Participant’s eligibility for Severance Pay or Severance Benefits or the amount of Severance Benefits provided under this Policy or under any plan, policy, program, arrangement or agreement that replaces this Policy.  This Policy may not be amended, modified or terminated in a manner that would subject any Participant to taxation of his Severance Benefits under Section 409A(a)(1) of the Code.

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ARTICLE VIII.
MISCELLANEOUS

Section 8.01            Accrued Obligations.  Notwithstanding any provision in this Policy to the contrary, a Participant who has a Termination of Employment shall receive all of the Accrued Obligations to which such Participant is entitled in accordance with the Company’s customary payroll practices and/or the terms of any applicable plan, program, policy or arrangement maintained by the Company without regard to whether the Participant is or may become entitled to any Severance Pay or Severance Benefits under this Policy and the payment of such Accrued Obligations shall not be conditioned upon the Participant’s execution of a Release.

Section 8.02            Successors and Assigns.  The obligations of the Company under this Policy shall be assumed by its successors and assigns.

Section 8.03            Employment Rights.  The existence of this Policy shall not confer any legal or other rights upon any employee to continuation of employment.  The Company and its subsidiaries reserve the right to terminate any employee with or without cause at any time, notwithstanding the provisions of this Policy.

Section 8.04            Controlling Law.  The provisions of this Policy shall be governed, construed and administered in accordance with ERISA.  To the extent that ERISA does not apply, the laws of the State of New Jersey shall be controlling, other than New Jersey law concerning conflicts of law.

Section 8.05            Interests Not Transferable.  The interest of persons entitled to Severance Benefits under this Policy are not subject to their debts or other obligations and, except as provided in Sections 4.06 and 8.02 above and Section 8.11 below, as required by federal or state garnishment orders issued to the Plan or the Company, or as may be required by ERISA, may not be voluntarily or involuntarily sold, transferred, alienated, assigned or encumbered.

Section 8.06            Representations Contrary to the Policy.  No officer or employee of the Company has the authority to alter, vary or modify the terms of the Policy or the Severance Benefits available to any Eligible Participant without the written consent of the Board or the Committee.  No verbal or written representations contrary to the terms of the Policy and any duly authorized written consent of the Board or Committee shall be binding upon the Company.

Section 8.07            Plan Funding.  No Participant or beneficiary thereof shall acquire by reason of this Policy any right in or title to any assets, funds, or property of the Company.  Any Severance Benefits that become payable under this Policy are unfunded obligations of the Company and shall be paid from the Company’s general assets.  No employee, officer, director or agent of the Company guarantees in any manner the payment of Severance Benefits. 

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Section 8.08            Headings.  The headings in this Plan are for convenience of reference and shall not be given substantive effect.

Section 8.09            Gender.  Except when the context indicates to the contrary, when used in this Policy, masculine terms shall be deemed to include the feminine.

Section 8.10            Severability.  If any provision of this Policy is held illegal or invalid for any reason, the other provisions of this Policy shall not be affected.

Section 8.11            Tax Withholding.  Notwithstanding any other provision of this Policy, the Company may withhold from any and all Severance Benefits such United States federal, state or local or foreign taxes as may be required to be withheld pursuant to any applicable law or regulation.

Section 8.12            Non-Exclusivity of Rights.  The terms of the Policy shall not prevent or limit the right of a Participant to receive any base annual salary, pension or welfare benefit, perquisite, bonus or other payment provided by the Company to the Participant, except for such rights as the Participant may have specifically waived in writing.  Amounts that are vested benefits or which the Participant is otherwise entitled to receive under any benefit policy or program provided by the Company shall be payable in accordance with the terms of such policy or program.

Section 8.13            Indemnification.  The CEO and the individuals serving on the Committee shall be indemnified to the fullest extent permitted by applicable law and the Company’s Bylaws. 

 

As adopted by the Compensation Committee
on June 21, 2018, and amended and restated as of June 10, 2022

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