Document:

Exhibit 10.7

 

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

 

PROMISSORY NOTE 

 

	Principal Amount: Up to $250,000	Dated as of February 10, 2021

 

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

 

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

 

2. Drawdown Requests.
Maker and Payee agree that Maker may request, from time to time, up to Two Hundred Fifty Thousand Dollars ($250,000) in drawdowns
under this Note to be used for costs and expenses related to Maker’s formation and the proposed initial public offering of
its securities (the “IPO”). Principal of this Note may be drawn down from time to time prior to the Maturity
Date upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request must state
the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000), unless agreed upon in writing
by Maker and Payee. Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request;
provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed Two Hundred Fifty
Thousand Dollars ($250,000). No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any
Drawdown Request by Maker.

 

3. Interest and Expenses.
No interest shall accrue on the unpaid principal balance of this Note. Maker will reimburse Payee for all costs incurred in the
collection of any sum due under this Note, including (without limitation) reasonable attorneys’ fees.

 

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

 

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

 

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

 

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

 

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

 

6. Remedies.

 

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

 

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

 

(c) Late payments shall
accrue interest at a rate of 8% per annum, or such lesser rate as is permissible by law.

 

7. Waivers. Maker
and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest,
and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under
the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property,
real or personal, or any part of the proceeds arising from any sale of any such property, from

 

     

     

    

 

attachment, levy or sale under execution, or
providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any
real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may
be sold upon any such writ in whole or in part in any order desired by Payee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature page follows]

 

     

     

    

 

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

 

	 	Climate Real Impact Solutions III Acquisition Corporation, a Delaware corporation
	 	 	 
	 	By:	/s/ John A. Cavalier
	 	 	Name: John A. Cavalier
	 	 	Title:   Chief Financial Officer

 

Accepted and agreed this 10th day of February, 2021

 

	Climate Real Impact
    Solutions III Sponsor, LLC, a Delaware limited liability
    company	 
	 	 	 
	By:	/s/ John A. Cavalier	 
	 	Name: John A. Cavalier	 
	 	Title:   Manager	 

 

[Signature Page to Promissory Note]Exhibit 4.1 

 

SPECIMEN UNIT CERTIFICATE 

 

NUMBER UNITS 

 

U-                
 

 

	SEE REVERSE FOR 

CERTAIN 

DEFINITIONS	Avalon Acquisition Inc.	 

 

CUSIP [•] 

 

UNITS CONSISTING OF ONE SHARE OF COMMON
STOCK AND ONE-HALF OF ONE 

 

REDEEMABLE WARRANT TO PURCHASE ONE SHARE
OF CLASS A COMMON STOCK 

 

THIS CERTIFIES THAT

 

is the owner of                 Units.

 

Each Unit (“Unit”) consists of one (1) share
of Class A common stock, par value $0.0001 per share (“Common Stock”), of Avalon Acquisition Inc., a Delaware
corporation (the “Company”), and one-half (1/2) of one redeemable warrant (each whole warrant, a “Warrant”).
Each whole Warrant entitles the holder to purchase one (1) share of Common Stock (subject to adjustment) for $11.50 per share
(subject to adjustment). Only whole Warrants are exercisable. Each Warrant will become exercisable on the later of (i) thirty
(30) days after the Company’s completion of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or other similar business combination with one or more businesses (each a “Business Combination”), and (ii) twelve
(12) months from the closing of the Company’s initial public offering, and will expire unless exercised before 5:00 p.m.,
New York City Time, on the date that is five (5) years after the date on which the Company completes its initial Business
Combination, or earlier upon redemption or liquidation (the “Expiration Date”). The shares of Common Stock and Warrants
comprising the Units represented by this certificate are not transferable separately prior to [•], 2021, unless Maxim Group
LLC elects to allow earlier separate trading, subject to the Company’s filing with the Securities and Exchange Commission
of a Current Report on Form 8-K containing an audited balance sheet reflecting the Company’s receipt of the gross proceeds
of the initial public offering and issuing a press release announcing when separate trading will begin. No fractional Warrants
will be issued upon separation of the Units and only whole Warrants will trade. The terms of the Warrants are governed by a Warrant
Agreement, dated as of [•], 2021, between the Company and Continental Stock Transfer & Trust Company, as Warrant
Agent, and are subject to the terms and provisions contained therein, all of which terms and provisions the holder of this certificate
consents to by acceptance hereof. Copies of the Warrant Agreement are on file at the office of the Warrant Agent at [_____________],
New York, New York [_____], and are available to any Upon the consummation of the Business Combination, the Units represented by
this certificate will automatically separate into the shares of Common Stock and Warrants comprising such Units.

 

Warrant holder on written request and without cost.

 

This certificate is not valid unless countersigned
by the Transfer Agent and registered by the Registrar of the Company.

 

This certificate shall be governed by and construed
in accordance with the laws of the State of New York.

 

Witness the facsimile signatures of its duly authorized
officers.

 

	By	 	 
	 	Chief Financial Officer	 

 

     

     

    

 

Avalon Acquisition Inc.

 

The Company will furnish without charge
to each unitholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof of the Company and the qualifications, limitations, or restrictions
of such preferences and/or rights.

 

The following abbreviations, when used
in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable
laws or regulations: 

	 	 	 	 	 	 	 	 
	TEN COM	—	as tenants in common	UNIF GIFT

MIN ACT	—	 	Custodian	 
	 	 	 	 	 	(Cust)	 	(Minor)
	TEN ENT	—	as tenants by the entireties	 	 	
        under Uniform Gifts to

Minors Act

	 	 	 	 	 	 
	 	 	 	 	 	(State)
	JT TEN	—	as joint tenants with right of

survivorship and not as tenants in

common	 	 	 

 

Additional abbreviations may also be used
though not in the above list.

 

     

     

    

 

For value received, hereby sells, assigns and transfers
unto 

	 	 	 
	PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE	 	 

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE, OF ASSIGNEE)

 

Units represented by the within Certificate, and do hereby
irrevocably constitute and appoint Attorney to transfer the said Units on the books of the within named Company with full power
of substitution in the premises.

	 	 	 
	Dated	 

	 	 	 
	 	Notice:The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
	Signature(s) Guaranteed:	 
	 	 
	THE SIGNATURE(S) MUST BE GUARANTEED

BY AN ELIGIBLE GUARANTOR INSTITUTION

(BANKS, STOCKBROKERS, SAVINGS AND

LOAN ASSOCIATIONS AND CREDIT UNIONS

WITH MEMBERSHIP IN AN APPROVED

SIGNATURE GUARANTEE MEDALLION

PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15

UNDER THE SECURITIES EXCHANGE ACT OF

1934, AS AMENDED, OR ANY SUCCESSOR

RULES).	 

 

In each case, as more fully described in the Company’s
final prospectus dated [•], 2021, the holder(s) of this certificate shall be entitled to receive a pro-rata portion of certain
funds held in the trust account established in connection with the Company’s initial public offering only in the event that
(i) the Company redeems the shares of Common Stock sold in its initial public offering and liquidates because it does not
consummate an initial business combination by the date set forth in the Company’s amended and restated certificate of incorporation,
(ii) the Company redeems the shares of Common Stock sold in its initial public offering in connection with a stockholder vote
to amend the Company’s amended and restated certificate of incorporation (a) to modify the substance or timing of the
Company’s obligation to allow redemption in connection with the Company’s initial business combination or to redeem
100% of the shares of the Common Stock if it does not consummate an initial business combination by the date set forth in the Company’s
amended and restated certificate of incorporation or (b) with respect to any other provisions relating to the rights of holders
of the shares of the Common Stock or pre-initial Business Combination activity or (iii) if the holder(s) seek(s) to redeem
for cash his, her or its respective shares of Common Stock in connection with a tender offer (or proxy solicitation, solely in
the event the Company seeks stockholder approval of the proposed initial business combination) setting forth the details of a proposed
initial business combination. In no other circumstances shall the holder(s) have any right or interest of any kind in or to the
trust account.

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