Document:

Exhibit
10.9

 

PROMISSORY
NOTE

 

	Principal	Loan Date	Maturity	Loan No	Call / Coll	Account	Officer	Initials
	$ 5,400,000.00	05-15-2017	05-16-2020	7101098	 	600714	***	 
	References
in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan
or item, 
Any
item above containing **** has been omitted due to text length limitations.

 

 

	Borrower:	bisco industries, inc.	Lender:	community bank
	 	1500 N. LAKEVIEW AVENUE	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	2300 EAST KATELLA AVENUE, SUITE 125
	 	 	 	ANAHEIM, CA 92806 
	 	 	 	 (800) 788-9999

 

 

 

	Principal Amount: $5,400,000.00	Date of Note: May 15, 2017

 

PROMISE
TO PAY. BISCO INDUSTRIES, INC. (“Borrower”) promises to pay to COMMUNITY BANK (“Lender”), or order, In lawful
money of the United States of America, the principal amount of Five Million Four Hundred Thousand & 00/100 Dollars ($5,400,000.00),
together with interest on the unpaid principal balance from May 16, 2017, until paid in full.

 

PAYMENT.
Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan In 35 regular payments of $27,142.24
each and one Irregular last payment estimated at $5,001,606.66. Borrower’s first payment is due June 16, 2017, and all subsequent
payments are due on the same day of each month after that. Borrower’s final payment will be due on May 16, 2020, and will be for
all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required
by applicable law, payments will be applied to any accrued unpaid interest; then to principal; then to late charges; then to any
unpaid collection costs. Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate
in writing.

 

VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index
which is the is the average of Interbank offered rates for 12 month(s) United States dollar-denominated deposits in the London
market as published by the Intercontinental Exchange. (the “Index”). The Index is not necessarily the lowest rate charged
by Lender on its loans. If the Index becomes unavailable during the term of this loan. Lender may designate a substitute index
after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change
will not occur more often than each twelve month period beginning on the first business day of the month following every twelve
month period of this Note and each subsequent twelve month period thereafter and shall be based on the Index in effect at the
close of the United States financial markets on the business day prior to the interest rate change date. Each interest rate change
date shall be referred to as a “Repricing Date”, and the period of time between Repricing Dates shall be referred to
as a “Repricing Period”. Borrower understands that Lender may make loans based on other rates as well. The Index
currently is 1.786% per annum. Interest on the unpaid principal balance of this Note will be calculated as described in the
“INTEREST CALCULATION METHOD” paragraph using a rate of 1.700 percentage points over the Index, resulting in an initial rate
of 3.486%. NOTICE; Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable
law. Whenever increases occur in the Interest rate. Lender, at its option, may do one or more of the following: (A) Increase Borrower’s
payments to ensure Borrower’s loan will pay off by its original final maturity date. (B) increase Borrower’s payments to cover
accruing interest, (C) increase the number of Borrower’s payments, and (D) continue Borrower’s payments at the same amount and
increase Borrower’s final payment.

 

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

 

PREPAYMENT.
Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not
be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except
for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments
will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments
under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower’s making fewer
payments. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar
language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including
any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered
to: COMMUNITY BANK, ANAHEIM BRANCH, 2300 EAST KATELLA AVENUE, SUITE 125, ANAHEIM, CA 92806.

 

LATE
CHARGE. If a payment is 15 days or more late, Borrower will be charged 6.000% of the unpaid portion of the regularly scheduled
payment or $5.00, whichever is greater.

 

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

 

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

 

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

 

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

 

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

 

Environmental
Default. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contained in
any environmental agreement executed in connection with any loan.

 

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

 

     

     

    

 

	 	PROMISSORY NOTE	 
	Loan No: 7101098	(Continued)	Page 2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

COLLATERAL.
Borrower acknowledges this Note is secured by the following collateral described in the security instruments listed herein:

 

(A)       a
Deed of Trust dated May 15, 2017, to a trustee in favor of Lender on real property located in ORANGE County, State of California.
That agreement contains the following due on sale provision: Lender may, at Lender’s option, declare immediately due and payable
all sums secured by the Deed of Trust upon the sale or transfer, without Lender’s prior written consent, of all or any part of
the Real Property, or any interest in the Real Property. A “sale or transfer” means the conveyance of Real Property or
any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether
by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than
three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust
holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Borrower is
a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five
percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case may be, of such Borrower,
However, this option shall not be exercised by Lender if such exercise is prohibited by applicable law.

 

(B)       an
Assignment of All Rents to Lender on real property located in ORANGE County, State of California.

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

	 	PROMISSORY NOTE	 
	Loan No: 7101098	(Continued)	Page 3

 

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

 

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

 

BORROWER:

 

BISCO
INDUSTRIES, INC.

 

	BY:	/s/ GLEN FRED CEILEY	 
	 	GLEN FRED CEILEY, CEO of BISCO INDUSTRIES, INC.	 

 

 

 

LaserPro,
Ver 171 10015 Copr. D*H USA Corporation 1997, 2017. All Rights Reserved - CA G:\CFI50\CFI\LPL\D20 FC TR-28804 PR-40Exhibit 10.10

 

 

 

COMMERCIAL GUARANTY

 

 

	Borrower:	bisco industries, inc.	Lender:	community bank
	 	1500 N. LAKEVIEW AVENUE	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	2300 EAST KATELLA AVENUE, SUITE 125
	 	 	 	ANAHEIM, CA 92806 
	 	 	 	(800) 788-9999
	Guarantor:	EACO corporation	 	 
	 	1500 N. LAKEVIEW AVENUE	 	 
	 	ANAHEIM, CA 92807	 	 

 

 

CONTINUING GUARANTEE OF PAYMENT
AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual
payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower’s obligations
under the Note and the Related Documents. This Is a guaranty of payment and performance and not of collection, so Lender can enforce
this Guaranty against Guarantor even when Lender has not exhausted Lender’s remedies against anyone else obligated to pay
the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness.
Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, In same-day
funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower’s obligations under the Note and Related
Documents. Under this Guaranty, Guarantor’s liability is unlimited and Guarantor’s obligations are continuing.

 

INDEBTEDNESS. The word “Indebtedness”
as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued
unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys’ fees, arising
from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that
Borrower individually or collectively or interchangeably with others, owes or will owe Lender. “Indebtedness” includes,
without limitation, loans, advances, debts, overdraft Indebtedness, credit card indebtedness, lease obligations, liabilities and
obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection
agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances,
loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations
whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated
or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety;
secured or unsecured; Joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;
originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions
that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished
and then afterwards increased or reinstated.

 

If Lender presently holds one or
more guaranties, or hereafter receives additional guaranties from Guarantor, Lender’s rights under all guaranties shall be cumulative.
This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor’s
liability will be Guarantor’s aggregate liability under the terms of this Guaranty and any such other unterminated guaranties.

 

CONTINUING GUARANTY. THIS
IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION
OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY,
ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY
FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM
TIME TO TIME.

 

DURATION OF GUARANTY. This Guaranty
will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower,
and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation
shall have been fully and finally paid and satisfied and all of Guarantor’s other obligations under this Guaranty shall
have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor’s
written notice of revocation must be mailed to Lender, by certified mail, at Lender’s address listed above or such other
place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after
actual receipt by Lender of Guarantor’s written revocation. For this purpose and without limitation, the term “new
Indebtedness” does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined
or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, “new
Indebtedness” does not Include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred
under a commitment that became binding before revocation; any renewals, extensions, substitutions, and modifications of the Indebtedness.
This Guaranty shall bind Guarantor’s estate as to the Indebtedness created both before and after Guarantor’s death
or incapacity, regardless of Lender’s actual notice of Guarantor’s death. Subject to the foregoing, Guarantor’s
executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might
have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness
shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors
shall not affect the liability of any remaining Guarantors under this Guaranty. Guarantor’s obligations under this Guaranty
shall be In addition to any of Guarantor’s obligations, or any of them, under any other guaranties of the Indebtedness or
any other person heretofore or hereafter given to Lender unless such other guaranties are modified or revoked in writing; and
this Guarantor shall not, unless provided in this Guaranty, affect, invalidate, or supersede any such other guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically
acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.00), shall not constitute
a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor’s heirs, successors and assigns so
long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars ($0.00).

 

GUARANTOR’S AUTHORIZATION TO
LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening
Guarantor’s liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or
more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional
credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment
or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on
the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for
the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or
deal with any one or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose;
(E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security
and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender In its discretion may determine; (G) to sell, transfer, assign or grant
participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part.

 

     

     

    

 

	 	COMMERCIAL GUARANTY	 
	Loan No: 7101098	(Continued)	Page 2

 

GUARANTOR’S REPRESENTATIONS
AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been
made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower’s
request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the
provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor
and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and
will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose
of all or substantially all of Guarantor’s assets, or any interest therein; (F) upon Lender’s request, Guarantor will provide
to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has
been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects
and fairly present Guarantor’s financial condition as of the dates the financial information is provided; (G) no material adverse
change has occurred in Guarantor’s financial condition since the date of the most recent financial statements provided to Lender
and no event has occurred which may materially adversely affect Guarantor’s financial condition; (H) no litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (I)
Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis information regarding Borrower’s financial condition. Guarantor agrees to
keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor’s risks
under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose
to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower.

 

GUARANTOR’S FINANCIAL STATEMENTS.
Guarantor agrees to furnish Lender with the following:

 

Additional Requirements. Annual
Statements. Guarantor to furnish to Lender as soon as available and in any event within one hundred twenty (120) after the
end of each fiscal year, Guarantor’s balance sheet and income statement for the year ended, audited by a certified public accountant
satisfactory to Lender

 

Debt Service Coverage Ratio.
Cause EACO Corporation (hereinafter, the “Operating Company”) to maintain a Debt Service Coverage Ratio of not
less than 1.25 to 1.00, to be measured at the end of each fiscal year. “Debt Service Coverage Ratio” is defined
as net income plus depreciation expenses and amortization expense for the Operating Company and rental payments less all operating
expenses excluding depreciation and interest on the real property collateral located at 1500 N. Lakeview Avenue, Anaheim, CA 92807
( the “Subject Property”), less cash distributions, cash withdrawals, and cash dividends for the Operating Company
all divided by the sum of current maturities of long term debt (for the Operating Company), and current maturities of capital
lease obligations (for the Operating Company) and the total debt service (principal including interest) for the real property
collateral. The first measurement date will be as of August 31, 2017.

 

All financial reports required to
be provided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor
as being true and correct.

 

GUARANTOR’S WAIVERS. Except
as prohibited by applicable law, Guarantor waives any right to require Lender to (A) make any presentment, protest, demand, or
notice of any kind, including notice of change of any terms of repayment of the Indebtedness, default by Borrower or any other
guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation
of new or additional Indebtedness; (B) proceed against any person, including Borrower, before proceeding against Guarantor; (C)
proceed against any collateral for the Indebtedness, including Borrower’s collateral, before proceeding against Guarantor; (D)
apply any payments or proceeds received against the Indebtedness in any order; (E) give notice of the terms, time, and place of
any sale of the collateral pursuant to the Uniform Commercial Code or any other law governing such sale; (F) disclose any information
about the Indebtedness, the Borrower, the collateral, or any other guarantor or surety, or about any action or nonaction of Lender;
or (G) pursue any remedy or course of action in Lender’s power whatsoever.

 

Guarantor also waives any and all
rights or defenses arising by reason of (H) any disability or other defense of Borrower, any other guarantor or surety or any other
person; (I) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (J) the application of proceeds
of the Indebtedness by Borrower for purposes other than the purposes understood and intended by Guarantor and Lender; (K) any act
of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower or any
other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by operation of law or otherwise; (L)
any statute of limitations in any action under this Guaranty or on the Indebtedness; or (M) any modification or change in terms
of the Indebtedness, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time
payment of the Indebtedness is due and any change in the interest rate, and including any such modification or change in terms
after revocation of this Guaranty on the Indebtedness incurred prior to such revocation.

 

Guarantor waives all rights of
subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available
to Guarantor by reason of California Civil Code Sections 2787 to 2855, inclusive.

 

Guarantor waives all rights and
any defenses arising out of an election of remedies by Lender even though that the election of remedies, such as a non-judicial
foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and reimbursement
against Borrower by operation of Section 580d of the California Code of Civil Procedure or otherwise.

 

Guarantor waives all rights and
defenses that Guarantor may have because Borrower’s obligation is secured by real property. This means among other things: (N)
Lender may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower. (O)
If Lender forecloses on any real property collateral pledged by Borrower: (1) the amount of Borrower’s obligation may be reduced
only by the price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale
price. (2) Lender may collect from Guarantor even If Lender, by foreclosing on the real property collateral, has destroyed any
right Guarantor may have to collect from Borrower. This is an unconditional and irrevocable waiver of any rights and defenses Guarantor
may have because Borrower’s obligation is secured by real property. These rights and defenses include, but are not limited to,
any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure.

 

Guarantor understands and agrees
that the foregoing waivers are unconditional and irrevocable waivers of substantive rights and defenses to which Guarantor might
otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those provided by
California laws of suretyship and guaranty, anti-deficiency laws, and the Uniform Commercial Code. Guarantor acknowledges that
Guarantor has provided these waivers of rights and defenses with the intention that they be fully relied upon by Lender. Guarantor
further understands and agrees that this Guaranty is a separate and independent contract between Guarantor and Lender, given for
full and ample consideration, and is enforceable on its own terms. Until all of the indebtedness is paid in full, Guarantor waives
any right to enforce any remedy Guarantor may have against the Borrower or any other guarantor, surety, or other person, and further,
Guarantor waives any right to participate in any collateral for the Indebtedness now or hereafter held by Lender.

 

     

     

    

 

	 	COMMERCIAL GUARANTY	 
	Loan No: 7101098	(Continued)	Page 3

 

Guarantor’s Understanding With
Respect To Waivers. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor’s full knowledge
of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective
only to the extent permitted by law or public policy.

 

Subordination of Borrower’s
Debts to Guarantor. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to
any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender
may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable
to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness.
Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee
in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender
full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and
shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to
file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary
or appropriate to perfect, preserve and enforce its rights under this Guaranty.

 

Miscellaneous Provisions.
The following miscellaneous provisions are a part of this Guaranty:

 

AMENDMENTS. This Guaranty,
together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth
in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.

 

ATTORNEYS’ FEES; EXPENSES.
Guarantor agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s legal expenses,
incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty,
and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s attorneys’ fees and legal
expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.
Guarantor also shall pay all court costs and such additional fees as may be directed by the court.

 

CAPTION HEADINGS. Caption
headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this
Guaranty.

 

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

 

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

 

INTEGRATION. Guarantor further
agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised
by Guarantor’s attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor’s intentions and parol evidence is
not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,
damages, and costs (including Lender’s attorneys’ fees) suffered or incurred by Lender as a result of any breach by Guarantor of
the warranties, representations and agreements of this paragraph.

 

INTERPRETATION. In all cases
where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have
been used in the plural where the context and construction so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the words “Borrower” and “Guarantor”
respectively shall mean all and any one or more of them. The words “Guarantor,” “Borrower,” and “Lender”
include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is
not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced.
Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to
be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies,
or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors,
partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance
upon the professed exercise of such powers shall be guaranteed under this Guaranty.

 

NOTICES. Any notice required
to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective
when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally
recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered
mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor
shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled “DURATION
OF GUARANTY.” Any party may change its address for notices under this Guaranty by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes. Guarantor agrees to keep
Lender informed at all times of Guarantor’s current address. Unless otherwise provided or required by law, if there is more than
one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors.

 

NO WAIVER BY LENDER. Lander
shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.
A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s right otherwise to demand
strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing
between Lender and Guarantor, shall constitute a waiver of any of Lender’s rights or of any of Guarantor’s obligations as to any
future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender.

 

SUCCESSORS AND ASSIGNS.
Subject to any limitations stated in this Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding upon and
inure to the benefit of the parties, their successors and assigns.

 

     

     

    

 

	 	COMMERCIAL GUARANTY	 
	Loan No: 7101098	(Continued)	Page 4

 

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

 

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

 

Definitions. The following
capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise
defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code:

 

BORROWER. The word “Borrower”
means BISCO INDUSTRIES, INC. and includes all co-signers and co-makers signing the Note and all their successors and assigns.

 

GAAP. The word “GAAP”
means generally accepted accounting principles.

 

GUARANTOR. The word “Guarantor”
means everyone signing this Guaranty, including without limitation EACO CORPORATION, and in each case, any signer’s successors
and assigns.

 

GUARANTY. The word “Guaranty”
means this guaranty from Guarantor to Lender.

 

INDEBTEDNESS. The word “Indebtedness”
means Borrower’s indebtedness to Lender as more particularly described in this Guaranty.

 

LENDER. The word “Lender”
means COMMUNITY BANK, its successors and assigns.

 

NOTE. The word “Note”
means and includes without limitation all of Borrower’s promissory notes and/or credit agreements evidencing Borrower’s loan obligations
in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions
for promissory notes or credit agreements.

 

RELATED DOCUMENTS. The words
“Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.

 

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES
HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY
IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED
IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO
MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MAY 15, 2017.

 

GUARANTOR:

 

	EACO CORPORATION	 
	 	 	 
	By:	/s/ GLEN FRED CEILEY	 
	 	GLEN FRED CEILEY, CEO of EACO
    CORPORATION	 

 

 

LaserPro,
Ver. 17.1 10 015 Copr D*H USA Corporation 1997, 2017. All Rights Reserved - CA G:\CFI50\CFI\LPL\E20 FC TR-28804 PR-40

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