BUSINESS LOAN AGREEMENT
Exhibit
10.30
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PRINCIPAL
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LOAN
DATE
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MATURITY
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LOAN
NO
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CALL/COLL
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ACCOUNT
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OFFICER
INITIALS
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$800,000.00
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04-25-2008
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04-25-2009
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R-13166891
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422
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086
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References
in the boxes above are for Xxxxxx'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:
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AMERICAN
CONSUMERS, INC. DBA SHOP RITE
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LENDER: |
GATEWAY
BANK & TRUST
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|
00
XXXXXX XXX
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XXXX
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||
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ROSSVILLE,
GA 30741
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0000
XXXXXXX XXX
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||
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RINGGOLD,
GA 30736
|
|||
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(000)
000-0000
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THIS
BUSINESS LOAN AGREEMENT dated April 25, 2008, is made and executed between
AMERICAN CONSUMERS, INC. DBA SHOP RITE ("Borrower") and GATEWAY BANK & TRUST
("Lender") on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial loan or
loans or other financial accommodations, including those which may be described
on any exhibit or schedule attached to this Agreement. Xxxxxxxx understands and
agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying
upon Borrower's representations, warranties, and agreements as set forth in this
Agreement; (B) the granting, renewing, or extending of any Loan by Xxxxxx at all
times shall be subject to Xxxxxx's sole judgment and discretion; and (C) all
such Loans shall be and remain subject to the terms and conditions of this
Agreement.
TERM.
This Agreement shall be effective as of April 25, 2008, and shall continue in
full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.
ADVANCE
AUTHORITY. The following person or persons are authorized to request advances
and authorize payments under the line of credit until Xxxxxx receives from
Xxxxxxxx, at Xxxxxx’s address shown above, written notice of revocation of such
authority: XXXXXXX X XXXXXXXXXX, President of AMERICAN CONSUMERS, INC. DBA SHOP
RITE, and XXXX X. XXXX, Chief Financial Officer of AMERICAN CONSUMERS, INC. DBA
SHOP RITE.
CONDITIONS
PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and
each subsequent Advance under this Agreement shall be subject to the fulfillment
to Xxxxxx's satisfaction of all of the conditions set forth in this Agreement
and in the Related Documents.
Loan
Documents. Borrower shall provide to Lender the following documents for the
Loan: (1) the Note; (2) Security Agreements granting to Lender security
interests in the Collateral; (3) financing statements and all other documents
perfecting Lender's Security Interests; (4) evidence of insurance as required
below; (5) guaranties; (6) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to Lender and
Xxxxxx's counsel.
Borrower's
Authorization. Borrower shall have provided in form and substance satisfactory
to Lender properly certified resolutions, duly authorizing the execution and
delivery of this Agreement, the Note and the Related Documents. In addition,
Borrower shall have provided such other resolutions, authorizations, documents
and instruments as Lender or its counsel, may require.
Payment
of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and
other expenses which are then due and payable as specified in this Agreement or
any Related Document.
Representations
and Warranties. The representations and warranties set forth in this Agreement,
in the Related Documents, and in any document or certificate delivered to Lender
under this Agreement are true and correct.
No Event
of Default. There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement or under any Related
Document.
(Continued)
Loan No:
R-13166891
Organization.
Borrower is a corporation for profit which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of the
laws of the State of Georgia. Borrower is duly authorized to transact business
in all other states in which Borrower is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
Borrower is doing business. Specifically, Borrower is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or financial
condition. Borrower has the full power and authority to own its properties and
to transact the business in which it is presently engaged or presently proposes
to engage. Borrower maintains its principal office at 00 XXXXXX XXX, XXXXXXXXX,
XX 00000. Unless Borrower has designated otherwise in writing, this is the
principal office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Xxxxxxxx's state of organization or any change in
Borrower's name. Borrower shall do all things necessary to preserve and to keep
in full force and effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to Borrower and
Xxxxxxxx's business activities.
Assumed
Business Names. Xxxxxxxx has filed or recorded all documents or filings required
by law relating to all assumed business names used by Xxxxxxxx. Excluding the
name of Xxxxxxxx, the following is a complete list of all assumed business names
under which Borrower does business: None.
Authorization.
Borrower's execution, delivery, and performance of this Agreement and all the
Related Documents have been duly authorized by all necessary action by Borrower
and do not conflict with, result in a violation of, or constitute a default
under (1) any provision of (a) Borrower's articles of incorporation or
organization, or bylaws, or (b) any agreement or other instrument binding upon
Borrower or (2) any law, governmental regulation, court decree, or order
applicable to Borrower or to Borrower's properties.
Financial
Information. Each of Xxxxxxxx's financial statements supplied to Xxxxxx truly
and completely disclosed Xxxxxxxx's financial condition as of the date of the
statement, and there has been no material adverse change in Xxxxxxxx's financial
condition subsequent to the date of the most recent financial statement supplied
to Lender. Borrower has no material contingent obligations except as disclosed
in such financial statements.
Legal
Effect. This Agreement constitutes, and any instrument or agreement Borrower is
required to give under this Agreement when delivered will constitute legal,
valid, and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms.
Properties.
Except as contemplated by this Agreement or as previously disclosed in
Xxxxxxxx's financial statements or in writing to Lender and as accepted by
Xxxxxx, and except for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of Borrower's properties free
and clear of all Security Interests, and has not executed any security documents
or financing statements relating to such properties. All of Xxxxxxxx's
properties are titled in Borrower's legal name, and Xxxxxxxx has not used or
filed a financing statement under any other name for at least the last five (5)
years.
Hazardous
Substances. Except as disclosed to and acknowledged by Xxxxxx in writing,
Borrower represents and warrants that: (1) During the period of Borrower's
ownership of the Collateral, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any Hazardous
Substance by any person on, under, about or from any of the Collateral. (2)
Borrower has no knowledge of, or reason to believe that there has been (a) any
breach or violation of any Environmental Laws; (b) any use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Collateral by any prior owners
or occupants of any of the Collateral; or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters. (3)
Neither Borrower nor any tenant, contractor, agent or other authorized user of
any of the Collateral shall use, generate, manufacture, store, treat, dispose of
or release any Hazardous Substance on, under, about or from any of the
Collateral; and any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations, and ordinances,
including without limitation all Environmental Laws. Borrower authorizes Lender
and its agents to enter upon the Collateral to make such inspections and tests
as Lender may deem appropriate to determine compliance of the Collateral with
this section of the Agreement. Any inspections or tests made by Lender shall be
at Borrower's expense and for Lender's purposes only and shall not be construed
to create any responsibility or liability on the part of Lender to Borrower or
to any other person. The representations and warranties contained herein are
based on Borrower's due diligence in investigating the Collateral for hazardous
waste and Hazardous Substances. Borrower hereby (1) releases and waives any
future claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (2) agrees to
indemnify, defend, and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on the
Collateral. The provisions of this section of the Agreement, including the
obligation to indemnify and defend, shall survive the payment of the
Indebtedness and the termination, expiration or satisfaction of this Agreement
and shall not be affected by Lender's acquisition of any interest in any of the
Collateral, whether by foreclosure or otherwise.
Page
2
(Continued)
Loan No:
R-13166891
Litigation
and Claims. No litigation, claim, investigation, administrative proceeding or
similar action (including those for unpaid taxes) against Borrower is pending or
threatened, and no other event has occurred which may materially adversely
affect Borrower's financial condition or properties, other than litigation,
claims, or other events, if any, that have been disclosed to and acknowledged by
Xxxxxx in writing.
Taxes. To
the best of Xxxxxxxx's knowledge, all of Xxxxxxxx's tax returns and reports that
are or were required to be filed, have been filed, and all taxes, assessments
and other governmental charges have been paid in full, except those presently
being or to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided.
Lien
Priority. Unless otherwise previously disclosed to Lender in writing, Xxxxxxxx
has not entered into or granted any Security Agreements, or permitted the filing
or attachment of any Security Interests on or affecting any of the Collateral
directly or indirectly securing repayment of Borrower's Loan and Note, that
would be prior or that may in any way be superior to Xxxxxx's Security Interests
and rights in and to such Collateral.
Binding
Effect. This Agreement, the Note, all Security Agreements (if any), and all
Related Documents are binding upon the signers thereof, as well as upon their
successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms.
AFFIRMATIVE
COVENANTS. Borrower covenants and agrees with Xxxxxx that, so long as this
Agreement remains in effect, Borrower will:
Notices
of Claims and Litigation. Promptly inform Xxxxxx in writing of (1) all material
adverse changes in Borrower's financial condition, and (2) all existing and all
threatened litigation, claims, investigations, administrative proceedings or
similar actions affecting Borrower or any Guarantor which could materially
affect the financial condition of Borrower or the financial condition of any
Guarantor.
Financial
Records. Maintain its books and records in accordance with GAAP, applied on a
consistent basis, and permit Xxxxxx to examine and audit Xxxxxxxx's books and
records at all reasonable times.
Financial
Statements. Furnish Lender with the following:
Annual
Statements. As soon as available, but in no event later than sixty (60) days
after the end of each fiscal year, Xxxxxxxx's balance sheet and income statement
for the year ended, prepared by Xxxxxxxx.
Tax
Returns. As soon as available, but in no event later than sixty (60) days after
the applicable filing date for the tax reporting period ended, Federal and other
governmental tax returns, prepared by a tax professional satisfactory to
Lender.
All
financial reports required to be provided under this Agreement shall be prepared
in accordance with GAAP, applied on a consistent basis, and certified by
Borrower as being true and correct.
Additional
Information. Furnish such additional information and statements, as Xxxxxx may
request from time to time.
Insurance.
Maintain fire and other risk insurance, public liability insurance, and such
other insurance as Lender may require with respect to Borrower's properties and
operations, in form, amounts, coverages and with insurance companies acceptable
to Lender. Borrower, upon request of Xxxxxx, will deliver to Lender from time to
time the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished
without at least thirty (30) days prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in favor of
Lender will not be impaired in any way by any act, omission or default of
Borrower or any other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest for the Loans, Borrower
will provide Lender with such lender's loss payable or other endorsements as
Lender may require.
Insurance
Reports. Furnish to Lender, upon request of Lender, reports on each existing
insurance policy showing such information as Lender may reasonably request,
including without limitation the following: (1) the name of the insurer; (2) the
risks insured; (3) the amount of the policy; (4) the properties insured; (5) the
then current property values on the basis of which insurance has been obtained,
and the manner of determining those values; and (6) the expiration date of the
policy. In addition, upon request of Lender (however not more often than
annually), Borrower will have an independent appraiser satisfactory to Lender
determine, as applicable, the actual cash value or replacement cost of any
Collateral. The cost of such appraisal shall be paid by Borrower.
Guaranties.
Prior to disbursement of any Loan proceeds, furnish executed guaranties of the
Loans in favor of Xxxxxx, executed by the guarantors named below, on Xxxxxx's
forms, and in the amounts and under the conditions set forth in those
guaranties.
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Names
of Guarantors
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Amounts
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XXXXXXX X. XXXXXXXXXX
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100.000%
of $800,000.00
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XXXX X. XXXX
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100.000%
of $800,000.00
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Other
Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party and
notify Lender immediately in writing of any default in connection with any other
such agreements.
Loan
Proceeds. Use all Loan proceeds solely for the following specific purposes:
BORROWER TO FURNISH BANK WITH QUATERLY BORROWING BASE REQUIRING BORROWER'S LINE
BALANCE TO STAY AT 40% OR LESS OF INVENTORY. BORROWER HAS 15 DAYS FROM THE DATE
OF THE CERTIFICATE TO CURE ANY IMBALANCE.
Taxes,
Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or
its properties, income, or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower's properties, income, or profits. Provided however,
Xxxxxxxx will not be required to pay and discharge any such assessment, tax,
charge, xxxx, xxxx or claim so long as (1) the legality of the same shall be
contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower’s books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with
GAAP.
Performance.
Perform and comply, in a timely manner, with all terms, conditions, and
provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender. Borrower shall
notify Xxxxxx immediately in writing of any default in connection with any
agreement.
Operations.
Maintain executive and management personnel with substantially the same
qualifications and experience as the present executive and management personnel;
provide written notice to Lender of any change in executive and management
personnel; conduct its business affairs in a reasonable and prudent
manner.
Environmental
Studies. Promptly conduct and complete, at Borrower's expense, all such
investigations, studies, samplings and testings as may be requested by Lender or
any governmental authority relative to any substance, or any waste or by-product
of any substance defined as toxic or a hazardous substance under applicable
federal, state, or local law, rule, regulation, order or directive, at or
affecting any property or any facility owned, leased or used by
Borrower.
Compliance
with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower's properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans With Disabilities Act. Borrower may contest in good faith any such
law, ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Xxxxxx's sole opinion, Xxxxxx's
interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Xxxxxx's interest.
Inspection.
Permit employees or agents of Lender at any reasonable time to inspect any and
all Collateral for the Loan or Loans and Xxxxxxxx's other properties and to
examine or audit Xxxxxxxx's books, accounts, and records and to make copies and
memoranda of Xxxxxxxx's books, accounts, and records. If Borrower now or at any
time hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of Xxxxxx,
shall notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies of any records it may
request, all at Borrower's expense.
Compliance
Certificates. Unless waived in writing by Xxxxxx, provide Lender at least
annually, with a certificate executed by Xxxxxxxx's chief financial officer, or
other officer or person acceptable to Lender, certifying that the
representations and warranties set forth in this Agreement are true and correct
as of the date of the certificate and further certifying that, as of the date of
the certificate, no Event of Default exists under this Agreement.
Environmental
Compliance and Reports. Borrower shall comply in all respects with any and all
Environmental Laws; not cause or permit to exist, as a result of an intentional
or unintentional action or omission on Borrower's part or on the part of any
third party, on property owned and/or occupied by Borrower, any environmental
activity where damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a permit issued
by the appropriate federal, state or local governmental authorities; shall
furnish to Lender promptly and in any event within thirty (30) days after
receipt thereof a copy of any notice, summons, lien, citation, directive, letter
or other communication from any governmental agency or instrumentality
concerning any intentional or unintentional action or omission on Borrower's
part in connection with any environmental activity whether or not there is
damage to the environment and/or other natural resources.
Page
4
(Continued)
Loan No:
R-13166891
Additional
Assurances. Make, execute and deliver to Lender such promissory notes,
mortgages, deeds of trust, security agreements, assignments, financing
statements, instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to perfect
all Security Interests.
XXXXXX'S
EXPENDITURES. If any action or proceeding is commenced that would materially
affect Xxxxxx's interest in the Collateral or if Borrower fails to comply with
any provision of this Agreement or any Related Documents, including but not
limited to Borrower's failure to discharge or pay when due any amounts Borrower
is required to discharge or pay under this Agreement or any Related Documents,
Lender on Borrower's behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at
any time levied or placed on any Collateral and paying all costs for insuring,
maintaining and preserving any Collateral. All such expenditures incurred or
paid by Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of repayment
by Xxxxxxxx. All such expenses will become a part of the Indebtedness and, at
Lender's option, will (A) be payable on demand; (B) be added to the balance of
the Note and be apportioned among and be payable with any installment payments
to become due during either (1) the term of any applicable insurance policy; or
(2) the remaining term of the Note; or (C) be treated as a balloon payment which
will be due and payable at the Note's maturity.
NEGATIVE
COVENANTS. Borrower covenants and agrees with Lender that while this Agreement
is in effect, Borrower shall not, without the prior written consent of
Lender:
Indebtedness
and Liens. (1) Except for trade debt incurred in the normal course of business
and indebtedness to Lender contemplated by this Agreement, create, incur or
assume indebtedness for borrowed money, including capital leases, (2) sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3)
sell with recourse any of Borrower's accounts, except to Xxxxxx.
Continuity
of Operations. ( 1) Engage in any business activities substantially different
than those in which Borrower is presently engaged, (2) cease operations,
liquidate, merge, transfer, acquire or consolidate with any other entity, change
its name, dissolve or transfer or sell Collateral out of the ordinary course of
business, or (3) pay any dividends on Borrower's stock (other than dividends
payable in its stock), provided, however that notwithstanding the foregoing, but
only so long as no Event of Default has occurred and is continuing or would
result from the payment of dividends, if Borrower is a "Subchapter S
Corporation" (as defined in the Internal Revenue Code of 1986, as amended),
Borrower may pay cash dividends on its stock to its shareholders from time to
time in amounts necessary to enable the shareholders to pay income taxes and
make estimated income tax payments to satisfy their liabilities under federal
and state law which arise solely from their status as Shareholders of a
Subchapter S Corporation because of their ownership of shares of Borrower's
stock, or purchase or retire any of Borrower's outstanding shares or alter or
amend Borrower's capital structure.
Loans,
Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to
any other person, enterprise or entity, (2) purchase, create or acquire any
interest in any other enterprise or entity, or (3) incur any obligation as
surety or guarantor other than in the ordinary course of business.
Agreements.
Borrower will not enter into any agreement containing any provisions which would
be violated or breached by the performance of Borrower's obligations under this
Agreement or in connection herewith.
CESSATION
OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower,
whether under this Agreement or under any other agreement, Lender shall have no
obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower
or any Guarantor is in default under the terms of this Agreement or any of the
Related Documents or any other agreement that Borrower or any Guarantor has with
Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged
a bankrupt; (C) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (E) Lender in good xxxxx xxxxx itself insecure, even
though no Event of Default shall have occurred.
RIGHT OF
SETOFF. To the extent permitted by applicable law, Lender reserves a right of
setoff in all Borrower's accounts with Lender (whether checking, savings, or
some other account). This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the future. However, this
does not include any IRA or Xxxxx accounts, or any trust accounts for which
setoff would be prohibited by law. Xxxxxxxx authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts, and, at Xxxxxx's option, to
administratively freeze all such accounts to allow Lender to protect Xxxxxx's
charge and setoff rights provided in this paragraph.
DEFAULT.
Each of the following shall constitute an Event of Default under this
Agreement:
Payment
Default. Xxxxxxxx fails to make any payment when due under the
Loan.
Other
Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement 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 or any Grantor's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.
False
Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time
thereafter.
Insolvency.
The dissolution or termination of Xxxxxxxx's existence as a going business, the
insolvency of Xxxxxxxx, the appointment of a receiver for any part of Xxxxxxxx'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.
Defective
Collateralization. This Agreement or any of the Related Documents ceases to be
in full force and effect (including failure of any collateral document to create
a valid and perfected security interest or lien) at any time and for any
reason.
Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, re- possession 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
Xxxxxxxx's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Xxxxxxxx as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Xxxxxx 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.
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
Xxxxxx believes the prospect of payment or performance of the Loan is
impaired.
Insecurity.
Lender in good faith believes itself insecure.
EFFECT OF
AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise
provided in this Agreement or the Related Documents, all commitments and
obligations of Lender under this Agreement or the Related Documents or any other
agreement immediately will terminate (including any obligation to make further
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Xxxxxx to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Xxxxxx's right to
declare a default and to exercise its rights and remedies.
Page
6
(Continued)
Loan No:
R-13166891
MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part of this
Agreement:
Amendments.
This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement 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. Xxxxxxxx agrees to pay upon demand all of Xxxxxx's costs and
expenses, including Xxxxxx's attorneys' fees and Xxxxxx's legal expenses,
incurred in connection with the enforcement of this Agreement. Lender may hire
or pay someone else to help enforce this Agreement, and Borrower shall pay the
costs and expenses of such enforcement. Costs and expenses include Xxxxxx'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. Borrower also shall pay all court
costs and such additional fees as may be directed by the court.
Caption
Headings. Caption headings in this Agreement are for convenience purposes only
and are not to be used to interpret or define the provisions of this
Agreement.
Consent
to Loan Participation. Xxxxxxxx agrees and consents to Xxxxxx's sale or
transfer, whether now or later, of one or more participation interests in the
Loan to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any limitation whatsoever, to any one or more purchasers,
or potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby
waives any rights to privacy Borrower may have with respect to such matters.
Borrower additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation
interests. Xxxxxxxx also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests. Borrower further
waives all rights of offset or counterclaim that it may have now or later
against Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Xxxxxxxx's obligation under the Loan irrespective of the failure or insolvency
of any holder of any interest in the Loan. Xxxxxxxx further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have against
Xxxxxx.
Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to
the extent not preempted by federal law, the laws of the State of Georgia
without regard to its conflicts of law provisions. This Agreement has been
accepted by Xxxxxx in the State of Georgia.
No Waiver
by Xxxxxx. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Xxxxxx. 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 Xxxxxx of a provision of
this Agreement 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 Agreement. No prior waiver by Xxxxxx, nor any course of dealing between
Xxxxxx and Borrower, or between Lender and any Grantor, shall constitute a
waiver of any of Lender's rights or of any of Borrower's or any Grantor's
obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, 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.
Notices.
Any notice required to be given under this Agreement shall be given in writing,
and 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 Agreement.
Any party may change its address for notices under this Agreement 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, Xxxxxxxx agrees to
keep Xxxxxx informed at all times of Xxxxxxxx's current address. Unless
otherwise provided or required by law, if there is more than one Borrower, any
notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers.
Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall
not make the offending provision illegal, invalid, or unenforceable as to any
other circumstance. If feasible, the offending provision shall be considered
modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality, invalidity, or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this
Agreement.
Subsidiaries
and Affiliates of Borrower. To the extent the context of any provisions of this
Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word "Borrower" as used in this Agreement shall
include all of Borrower's subsidiaries and affiliates. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other financial accommodation to any of
Borrower's subsidiaries or affiliates.
Successors
and Assigns. All covenants and agreements by or on behalf of Borrower contained
in this Agreement or any Related Documents shall bind Xxxxxxxx's successors and
assigns and shall inure to the benefit of Lender and its successors and assigns.
Borrower shall not, however, have the right to assign Xxxxxxxx's rights under
this Agreement or any interest therein, without the prior written consent of
Lender.
Survival
of Representations and Warranties. Xxxxxxxx understands and agrees that in
extending Loan Advances, Xxxxxx is relying on all representations, warranties,
and covenants made by Borrower in this Agreement or in any certificate or other
instrument delivered by Borrower to Lender under this Agreement or the Related
Documents. Borrower further agrees that regardless of any investigation made by
Xxxxxx, all such representations, warranties and covenants will survive the
extension of Loan Advances and delivery to Lender of the Related Documents,
shall be continuing in nature, shall be deemed made and redated by Xxxxxxxx at
the time each Loan Advance is made, and shall remain in full force and effect
until such time as Borrower's Indebtedness shall be paid in full, or until this
Agreement shall be terminated in the manner provided above, whichever is the
last to occur.
Time is
of the Essence. Time is of the essence in the performance of this
Agreement.
DEFINITIONS.
The following capitalized words and terms shall have the following meanings when
used in this Agreement. 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 Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words and
terms not otherwise defined in this Agreement shall have the meanings assigned
to them in accordance with generally accepted accounting principles as in effect
on the date of this Agreement:
Advance.
The word "Advance" means a disbursement of Loan funds made, or to be made, to
Borrower or on Borrower's behalf on a line of credit or multiple advance basis
under the terms and conditions of this Agreement.
Agreement.
The word "Agreement" means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all
exhibits and schedules attached to this Business Loan Agreement from time to
time.
Borrower.
The word "Borrower" means AMERICAN CONSUMERS, INC. DBA SHOP RITE and includes
all co-signers and co-makers signing the Note and all their successors and
assigns.
Collateral.
The word "Collateral" means all property and assets granted as collateral
security for a Loan, whether real or personal property, whether granted directly
or indirectly, whether granted now or in the future, and whether granted in the
form of a security interest, mortgage, collateral mortgage, deed of trust,
assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust receipt,
lien, charge, lien or title retention contract, lease or consignment intended as
a security device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.
Environmental
Laws. The words "Environmental Laws" mean any and all state, federal and local
statutes, regulations and ordinances relating to the protection of human health
or the environment, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section
9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules,
or regulations adopted pursuant thereto.
Event of
Default. The words "Event of Default" mean any of the events of default set
forth in this Agreement in the default section of this Agreement.
GAAP. The
word "GAAP" means generally accepted accounting principles.
Grantor.
The word "Grantor" means each and all of the persons or entities granting a
Security Interest in any Collateral for the Loan, including without limitation
all Borrowers granting such a Security Interest.
Page
8
BUSINESS
LOAN AGREEMENT
(Continued)
No:
R-13166891
Guarantor.
The word "Guarantor" means any guarantor, surety, or accommodation party of any
or all of the Loan.
Guaranty.
The word "Guaranty" means the guaranty from Guarantor to Lender, including
without limitation a guaranty of all or part of the Note.
Hazardous
Substances. The words "Hazardous Substances" mean materials that, because of
their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health
or the environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances" also
includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.
Indebtedness.
The word "Indebtedness" means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this
Agreement or under any of the Related Documents.
Lender.
The word "Lender" means GATEWAY BANK & TRUST, its successors and
assigns.
Loan. The
word "Loan" means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including
without limitation those loans and financial accommodations described herein or
described on any exhibit or schedule attached to this Agreement from time to
time.
Note. The
word "Note" means the Note executed by AMERICAN CONSUMERS, INC. DBA SHOP RITE in
the principal amount of $800,000.00 dated April 25, 2008, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations of
substitutions for the note or credit agreement.
Permitted
Liens. The words "Permitted Liens" mean (1) liens and security interests
securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of
this Agreement or permitted to be incurred under the paragraph of this Agreement
titled "Indebtedness and Liens"; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing; and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Xxxxxxxx's assets.
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 Loan.
Security
Agreement. The words "Security Agreement" mean and include without limitation
any agreements, promises, covenants, arrangements, understandings or other
agreements, whether created by law, contract, or otherwise, evidencing,
governing, representing, or creating a Security Interest.
Security
Interest. The words "Security Interest" mean, without limitation, any and all
types of collateral security, present and future, whether in the form of a lien,
charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge,
crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien or title
retention contract, lease or consignment intended as a security device, or any
other security or lien interest whatsoever whether created by law, contract, or
otherwise.
XXXXXXXX
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND
XXXXXXXX AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED APRIL 25,
2008.
THIS
AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND
SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO
LAW.
BORROWER:
|
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
|||||
|
By:
|
/s/
Xxxxxxx X. Xxxxxxxxxx
|
(Seal)
|
By:
|
/s/
Xxxx X. Xxxx
|
(Seal)
|
|
XXXXXXX X. XXXXXXXXXX,
President of
|
XXXX X. XXXX,
Chief Financial Officer of
|
||||
|
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
||||
LENDER:
GATEWAY
BANK & TRUST
|
By:
|
/s/
Xxxxx Xxxxxx
|
(Seal)
|
|
|
Authorized
Signer
|
Page
9
PROMISORY
NOTE
|
PRINCIPAL
|
LOAN
DATE
|
MATURITY
|
LOAN
NO
|
CALL /COLL
|
ACCOUNT
|
OFFICER
INITIALS
|
|
$800,000.00
|
04-25-2008
|
04-25-2009
|
R-13166891
|
422
|
|
086
|
References
in the boxes above are for Xxxxxx'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:
|
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
LENDER:
|
GATEWAY
BANK & TRUST
|
|
00
XXXXXX XXX
|
XXXX
|
||
|
ROSSVILLE,
GA 30741
|
0000
XXXXXXX XXX XXXXXXXX, XX 00000
|
||
|
(000)
000-0000
|
Principal
Amount: $800,000.00 Initial Rate: 6.000% Date of Note: April 25,
2008
PROMISE
TO PAY. AMERICAN CONSUMERS, INC. DBA SHOP RITE ("Borrower") promises to pay to
GATEWAY BANK & TRUST ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Eight Hundred Thousand & 00/100
Dollars ($800,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each
advance.
PAYMENT.
Borrower will pay this loan in one payment of all outstanding principal plus all
accrued unpaid Interest on April 25, 2009. In addition, Borrower will pay
regular monthly payments of all accrued unpaid interest due as of each payment
date, beginning June 5, 2008, with all subsequent interest payments to be due on
the same day of each month after that. Unless otherwise agreed or required by
applicable law, payments will be applied first to any accrued unpaid interest;
then to principal; then to any unpaid collection costs; and then to any late
charges. The annual interest rate for this Note is computed on a 365/360 basis;
that is, by applying the ratio of the annual 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. Borrower will pay Lender at
Xxxxxx's address shown above or at such other place as Lender may designate in
writing.
VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to
time based on changes in an independent index which is the Wall Street Journal
(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 Xxxxxxxx's request. The interest rate
change will not occur more often than each month. Borrower understands that
Lender may make loans based on other rates as well. The Index currently is
5.250% per annum. The interest rate to be applied to the unpaid principal
balance during this Note will be at a rate equal to the Index, adjusted if
necessary for any minimum and maximum rate limitations described below,
resulting in an initial annual rate of simple interest of 6.000%. NOTICE: Under
no circumstances will the interest rate on this Note be less than 6.000% per
annum or more than the maximum rate allowed by applicable law.
PREPAYMENT;
MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of this Note,
Xxxxxxxx understands that Lender is entitled to a minimum interest charge of $
10.00. Other than Xxxxxxxx's obligation to pay any minimum interest charge,
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 Xxxxxx in writing,
relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to make payments of
accrued unpaid interest. Rather, early payments will reduce the principal
balance due. Xxxxxxxx agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Xxxxxx may accept it without losing any of Xxxxxx'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:
GATEWAY BANK & TRUST, Main, 0000 Xxxxxxx Xxx, Xxxxxxxx,
XX 00000.
LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged $25.00,
regardless of any partial payments Lender has received.
INTEREST
AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the
total sum due under this Note will continue to accrue interest at the interest
rate under this Note. However, in no event will the interest rate exceed the
maximum interest rate limitations under applicable law.
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.
PROMISSORY
NOTE
(Continued)
Loan No:
R-13166891
Default
in Favor of Third Parties. Borrower or any Grantor defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the related
documents.
False
Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time
thereafter.
Insolvency.
The dissolution or termination of Xxxxxxxx's existence as a going business, the
insolvency of Xxxxxxxx, the appointment of a receiver for any part of Xxxxxxxx'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
Xxxxxxxx's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Xxxxxxxx as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Xxxxxx 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
Xxxxxx believes the prospect of payment or performance of this Note is
impaired.
Insecurity.
Lender in good faith believes itself insecure.
LENDER'S
RIGHTS. Upon default, Xxxxxx 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, Xxxxxx's costs of collection,
including court costs and fifteen percent (15%) of the principal plus accrued
interest as attorneys' fees, if any sums owing under this Note are collected by
or through an attorney at law, whether or not there is a lawsuit, and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), and appeals. If not prohibited by applicable law,
Xxxxxxxx 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 Georgia without
regard to its conflicts of law provisions. This Note has been accepted by Xxxxxx
in the State of Georgia.
DISHONORED
ITEM FEE. Borrower will pay a fee to Lender of $ 15.00 or five percent (5%) of
the face amount of the check, whichever is greater, if Borrower makes a payment
on Borrower's loan and the check or preauthorized charge with which Borrower
pays is later dishonored.
RIGHT OF
SETOFF. To the extent permitted by applicable law, Lender reserves a right of
setoff in all Borrower's accounts with Lender (whether checking, savings, or
some other account). This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the future. However, this
does not include any IRA or Xxxxx accounts, or any trust accounts for which
setoff would be prohibited by law. Borrower authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Xxxxxx's option, to
administratively freeze all such accounts to allow Lender to protect Xxxxxx's
charge and setoff rights provided in this paragraph.
Page
2
PROMISSORY
NOTE
(Continued)
Loan No:
R-13166891
COLLATERAL.
Borrower acknowledges this Note is secured by UCC ON ALL BUSINESS ASSETS,
INCLUDING BUT NOT LIMITED TO: ACCOUNTS, A/R, CASH FLOW, INVENTORY,
FURNITURE, FIXTURES, EQUIPMENT, REFIRIGERATORS, FREEZERS, MACHINERY, COMPUTERS,
REGISTERS, LEASEHOLD IMPROVEMENTS; CD#22021108 WITH THE APPROXIMATE BALANCE OF
$300,000.00.
LINE OF
CREDIT. This Note evidences a revolving line of credit. Advances under this Note
may be requested either orally or in writing by Xxxxxxxx or as provided in this
paragraph. Lender may, but need not, require that all oral requests be confirmed
in writing. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Xxxxxx's office shown above. The
following person or persons are authorized to request advances and authorize
payments under the line of credit until Xxxxxx receives from Xxxxxxxx, at
Xxxxxx's address shown above, written notice of revocation of their authority:
XXXXXXX X. XXXXXXXXXX, President of AMERICAN CONSUMERS, INC. DBA SHOP RITE; and
XXXX X. XXXX, Chief Financial Officer of AMERICAN CONSUMERS, INC. DBA
SHOP RITE. Xxxxxxxx agrees to be liable for all sums either: (A) advanced in
accordance with the instructions of an authorized person or (B) credited to any
of Xxxxxxxx's accounts with Xxxxxx. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by Xxxxxx's
internal records, including daily computer print-outs.
SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon Xxxxxxxx, and upon
Xxxxxxxx'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. 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: GATEWAY BANK
& TRUST P. O. Box 129 RINGGOLD, GA 30736.
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 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 waive any right to require Lender to take action against any other party
who signs this Note as provided in O.C.G.A. Section 10-7-24 and 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 Xxxxxx'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 Xxxxxx 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.
THIS NOTE
IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE
AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
BORROWER:
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
By:
|
/s/
Xxxxxxx X. Xxxxxxxxxx
|
(Seal)
|
By: |
/s/
Xxxx X. Xxxx
|
(Seal)
|
|
XXXXXXX X. XXXXXXXXXX,
President of
|
XXXX X. XXXX,
Chief Financial Officer of
|
||||
|
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
|
Page 3
