COMMERCIAL SECURITY AGREEMENT
EXHIBIT
10.43
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
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INITIALS
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$56,000.00
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09-02-2008
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09-22-2013
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452
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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.
GRANTOR:
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AMERICAN
CONSUMERS, INC., DBA SHOP RITE
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LENDER:
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GATEWAY
BANK & TRUST
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00
XXXXXX XXX
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XXXX
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ROSSVILLE,
GA 30741
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0000
XXXXXXX XXX
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RINGGOLD,
GA 30736
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||||
(000)
000-0000
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THIS
COMMERCIAL SECURITY AGREEMENT dated September 2, 2008, is made and executed
between AMERICAN CONSUMERS, INC. DBA SHOP RITE (“Grantor”) and GATEWAY BANK
& TRUST (“Lender”).
COLLATERAL
DESCRIPTION. The word “Collateral” as used in this Agreement means the following
described property, whether now owned or hereafter acquired, whether now
existing or hereafter arising, and wherever located, in which Grantor is giving
to Lender a security interest for the payment of the Indebtedness and
performance of all other obligations under the Note and this
Agreement:
UCC
ON REGISTER SYSTEM AND ALL BUSINESS ASSETS INCLUDING BUT NOT LIMITED TO:
ACCOUNTS, A/R, CASH FLOW, INVENTORY, FURNITURE, FIXTURES, EQUIPMENT, MACHINERY,
COMPUTERS, REGISTERS, LEASEHOLD IMPROVEMENTS, ETC.
In
addition, the word “Collateral” also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(A) All
accessions, attachments, accessories, replacements of and additions to any of
the collateral described herein, whether added now or later.
(B) All
products and produce of any of the property described in this Collateral
section.
(C) All
accounts, general intangibles, instruments, rents, monies, payments, and all
other rights, arising out of a sale, lease, consignment or other disposition of
any of the property described in this Collateral section.
(D) All
proceeds (including insurance proceeds) from the sale, destruction, loss, or
other disposition of any of the property described in this Collateral section,
and sums due from a third party who has damaged or destroyed the Collateral or
from that party’s insurer, whether due to judgment, settlement or other
process.
(E) All
records and data relating to any of the property described in this Collateral
section, whether in the form of a writing, photograph, microfilm, microfiche, or
electronic media, together with all of Grantor’s right, title, and interest in
and to all computer software required to utilize, create, maintain, and process
any such records or data on electronic media.
CROSS-COLLATERALIZATION.
In addition to the Note, this Agreement secures all obligations, debts and
liabilities, plus interest thereon, of Grantor to Lender, or any one or more of
them, as well as all claims by Lender against Grantor or any one or more of
them, whether now existing or hereafter arising, whether related or unrelated to
the purpose of the Note, whether voluntary or otherwise, whether due or not due,
direct or indirect, determined or undetermined, absolute or contingent,
liquidated or unliquidated, whether Grantor may be liable individually or
jointly with others, whether obligated as guarantor, surety, accommodation party
or otherwise, and whether recovery upon such amounts may be or hereafter may
become barred by any statute of limitations, and whether the obligation to repay
such amounts may be or hereafter may become otherwise
unenforceable.
Page
1
(Continued)
RIGHT OF
SETOFF. To the extent permitted by applicable law, Lender reserves a right of
setoff in all Grantor’s accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Grantor holds jointly with someone
else and all accounts Grantor 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. Grantor 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.
Perfection
of Security Interest. Xxxxxxx agrees to take whatever actions are requested by
Xxxxxx to perfect and continue Xxxxxx’s security interest in the Collateral.
Upon request of Xxxxxx, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Xxxxxx’s interest upon any and all chattel paper and instruments if not
delivered to Lender for possession by Xxxxxx. This is a continuing Security
Agreement and will continue in effect even though all or any part of the
Indebtedness is paid in full and even though for a period of time Grantor may
not be indebted to Lender.
Notices
to Lender. Grantor will promptly notify Lender in writing at Lender’s address
shown above (or such other addresses as Lender may designate from time to time)
prior to any (1) change in Grantor’s name; (2) change in Grantor’s assumed
business name(s); (3) change in the management of the Corporation Grantor; (4)
change in the authorized signer(s); (5) change in Grantor’s principal office
address; (6) change in Grantor’s state of organization; (7) conversion of
Grantor to a new or different type of business entity; or (8) change in any
other aspect of Grantor that directly or indirectly relates to any agreements
between Grantor and Lender. No change in Grantor’s name or state of organization
will take effect until after Xxxxxx has received notice.
Location
of the Collateral. Except in the ordinary course of Xxxxxxx’s business, Xxxxxxx
agrees to keep the Collateral at Grantor’s address shown above or at such other
locations as are acceptable to Lender. Upon Lender’s request, Grantor will
deliver to Lender in form satisfactory to Lender a schedule of real properties
and Collateral locations relating to Grantor’s operations, including without
limitation the following: (1) all real property Grantor owns or is purchasing;
(2) all real property Grantor is renting or leasing; (3) all storage facilities
Grantor owns, rents, leases, or uses; and (4) all other properties where
Collateral is or may be located.
Removal
of the Collateral. Except in the ordinary course of Grantor’s business, Grantor
shall not remove the Collateral from its existing location without Lender’s
prior written consent. Grantor shall, whenever requested, advise Lender of the
exact location of the Collateral.
Page
2
(Continued)
Inspection
of Collateral. Lender and Xxxxxx’s designated representatives and agents shall
have the right at all reasonable times to examine and inspect the Collateral
wherever located.
Taxes,
Assessments and Liens. Grantor will pay when due all taxes, assessments and
liens upon the Collateral, its use or operation, upon this Agreement, upon any
promissory note or notes evidencing the Indebtedness, or upon any of the other
Related Documents. Grantor may withhold any such payment or may elect to contest
any lien if Grantor is in good faith conducting an appropriate proceeding to
contest the obligation to pay and so long as Xxxxxx’s interest in the Collateral
is not jeopardized in Xxxxxx’s sole opinion. If the Collateral is subjected to a
lien which is not discharged within fifteen (15) days, Grantor shall deposit
with Lender cash, a sufficient corporate surety bond or other security
satisfactory to Lender in an amount adequate to provide for the discharge of the
lien plus any interest, costs, attorneys’ fees or other charges that could
accrue as a result of foreclosure or sale of the Collateral. In any contest
Grantor shall defend itself and Xxxxxx and shall satisfy any final adverse
judgment before enforcement against the Collateral. Grantor shall name Xxxxxx as
an additional obligee under any surety bond furnished in the contest
proceedings. Xxxxxxx further agrees to furnish Lender with evidence that such
taxes, assessments, and governmental and other charges have been paid in full
and in a timely manner. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Xxxxxx’s interest in
the Collateral is not jeopardized.
Page
3
(Continued)
Application
of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or
damage to the Collateral, whether or not such casualty or loss is covered by
insurance. Lender may make proof of loss if Grantor fails to do so within
fifteen (15) days of the casualty. All proceeds of any insurance on the
Collateral, including accrued proceeds thereon, shall be held by Lender as part
of the Collateral. If Lender consents to repair or replacement of the damaged or
destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay
or reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration. If Lender does not consent to repair or replacement of the
Collateral, Lender shall retain a sufficient amount of the proceeds to pay all
of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which
have not been disbursed within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral shall
be used to prepay the Indebtedness.
Insurance
Reports. Grantor, upon request of Xxxxxx, shall furnish to Lender reports on
each existing policy of insurance showing such information as Lender may
reasonably request including the following: (1) the name of the insurer; (2) the
risks insured; (3) the amount of the policy; (4) the property insured; (5) the
then current value on the basis of which insurance has been obtained and the
manner of determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often than
annually) have an independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral.
Page
4
(Continued)
XXXXXX’S
EXPENDITURES. If any action or proceeding is commenced that would materially
affect Lender’s interest in the Collateral or if Grantor fails to comply with
any provision of this Agreement or any Related Documents, including but not
limited to Grantor’s failure to discharge or pay when due any amounts Grantor is
required to discharge or pay under this Agreement or any Related Documents,
Lender on Grantor’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 the Collateral and paying all costs for insuring,
maintaining and preserving the 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 Grantor. 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. The Agreement also will secure
payment of these amounts. Such right shall be in addition to all other rights
and remedies to which Xxxxxx may be entitled upon Default.
Payment
Default. Grantor fails to make any payment when due under the
Indebtedness.
False
Statements. Any warranty, representation or statement made or furnished to
Lender by Grantor or on Grantor’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.
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.
Insolvency.
The dissolution or termination of Grantor’s existence as a going business, the
insolvency of Grantor, the appointment of a receiver for any part of Grantor’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 Grantor.
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 Grantor or by any governmental agency against
any collateral securing the Indebtedness. This includes a garnishment of any of
Grantor’s accounts, including deposit accounts, with Xxxxxx. However, this Event
of Default shall not apply if there is a good faith dispute by Grantor as to the
validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor 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.
Page
5
(Continued)
Events
Affecting Guarantor. Any of the preceding events occurs with respect to any
Guarantor of any of the Indebtedness or Guarantor dies or becomes incompetent or
revokes or disputes the validity of, or liability under, any Guaranty of the
Indebtedness.
Adverse
Change. A material adverse change occurs in Grantor’s financial condition, or
Xxxxxx believes the prospect of payment or performance of the Indebtedness is
impaired.
Insecurity.
Lender in good faith believes itself insecure.
Accelerate
Indebtedness. Xxxxxx may declare the entire Indebtedness, including any
prepayment penalty which Grantor would be required to pay, immediately due and
payable, without notice of any kind to Grantor.
Sell the
Collateral. Lender shall have full power to sell, lease, transfer, or otherwise
deal with the Collateral or proceeds thereof in Lender’s own name or that of
Grantor. Lender may sell the Collateral at public auction or private sale.
Unless the Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender will give Grantor, and other
persons as required by law, reasonable notice of the time and place of any
public sale, or the time after which any private sale or any other disposition
of the Collateral is to be made. However, no notice need be provided to any
person who, after Event of Default occurs, enters into and authenticates an
agreement waiving that person’s right to notification of sale. The requirements
of reasonable notice shall be met if such notice is given at least ten (10) days
before the time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the expenses of
retaking, holding, insuring, preparing for sale and selling the Collateral,
shall become a part of the Indebtedness secured by this Agreement and shall be
payable on demand, with interest at the Note rate from date of expenditure until
repaid.
Appoint
Receiver. Lender shall have the right to have a receiver appointed to take
possession of all or any part of the Collateral, with the power to protect and
preserve the Collateral, to operate the Collateral preceding foreclosure or
sale, and to collect the Rents from the Collateral and apply the proceeds, over
and above the cost of the receivership, against the Indebtedness. The receiver
may serve without bond if permitted by law. Xxxxxx’s right to the appointment of
a receiver shall exist whether or not the apparent value of the Collateral
exceeds the Indebtedness by a substantial amount. Employment by Xxxxxx shall not
disqualify a person from serving as a receiver.
Collect
Revenues, Apply Accounts. Lender, either itself or through a receiver, may
collect the payments, rents, income, and revenues from the Collateral. Lender
may at any time in Xxxxxx’s discretion transfer any Collateral into Xxxxxx’s own
name or that of Xxxxxx’s nominee and receive the payments, rents, income, and
revenues therefrom and hold the same as security for the Indebtedness or apply
it to payment of the Indebtedness in such order of preference as Lender may
determine. Insofar as the Collateral consists of accounts, general intangibles,
insurance policies, instruments, chattel paper, choses in action, or similar
property, Lender may demand, collect, receipt for, settle, compromise, adjust,
sue for, foreclose, or realize on the Collateral as Lender may determine,
whether or not Indebtedness or Collateral is then due. For these purposes,
Xxxxxx may, on behalf of and in the name of Grantor, receive, open and dispose
of mail addressed to Grantor; change any address to which mail and payments are
to be sent; and endorse notes, checks, drafts, money orders, documents of title,
instruments and items pertaining to payment, shipment, or storage of any
Collateral. To facilitate collection, Xxxxxx may notify account debtors and
obligors on any Collateral to make payments directly to Lender.
Page
6
(Continued)
Other
Rights and Remedies. Lender shall have all the rights and remedies of a secured
creditor under the provisions of the Uniform Commercial Code, as may be amended
from time to time. In addition, Lender shall have and may exercise any or all
other rights and remedies it may have available at law, in equity, or
otherwise.
Election
of Remedies. Except as may be prohibited by applicable law, all of Lender’s
rights and remedies, whether evidenced by this Agreement, the Related Documents,
or by any other writing, 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 Grantor under this Agreement, after Xxxxxxx’s failure
to perform, shall not affect Xxxxxx’s right to declare a default and exercise
its remedies.
MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part of this
Agreement:
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 Grantor, shall constitute a waiver of any of Lender’s rights or of
any of 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.
Page
7
(Continued)
Successors
and Assigns. Subject to any limitations stated in this Agreement on transfer of
Grantor’s interest, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Grantor, Lender, without notice
to Grantor, may deal with Xxxxxxx’s successors with reference to this Agreement
and the Indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement or liability under the
Indebtedness.
Survival
of Representations and Warranties. All representations, warranties, and
agreements made by Grantor in this Agreement shall survive the execution and
delivery of this Agreement, shall be continuing in nature, and shall remain in
full force and effect until such time as Grantor’s Indebtedness shall be paid in
full.
Time is
of the Essence. Time is of the essence in the performance of this
Agreement.
Agreement.
The word “Agreement” means this Commercial Security Agreement, as this
Commercial Security Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Commercial Security
Agreement from time to time.
Collateral.
The word “Collateral” means all of Grantor’s right, title and interest in and to
all the Collateral as described in the Collateral Description section of this
Agreement.
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.
Page
8
COMMERCIAL
SECURITY AGREEMENT
(Continued)
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.
Guarantor.
The word “Guarantor” means any guarantor, surety, or accommodation party of any
or all of the Indebtedness.
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.
Note. The
word “Note” means the Note executed by AMERICAN CONSUMERS, INC. DBA SHOP RITE in
the principal amount of $56,000.00 dated September 2, 2008, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations
of, and substitutions for the note or credit agreement.
GRANTOR
HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT
AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTEMBER 2, 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.
GRANTOR:
AMERICAN
CONSUMERS, INC. DBA SHOP RITE
By:
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/s/
Xxxxxxx X. Xxxxxxxxxx
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(Seal)
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By:
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/s/
Xxxx X. Xxxx
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(Seal)
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XXXXXXX
X. XXXXXXXXXX, President of
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XXXX
X. XXXX, Chief Financial Officer of
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AMERICAN
CONSUMERS, INC. DBA SHOP RITE
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AMERICAN
CONSUMERS, INC. DBA SHOP RITE
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