EXHIBIT 10.39
COMMERCIAL SECURITY AGREEMENT
--------------------------------------------------------------------------------
PRINCIPAL
LOAN DATE
MATURITY
LOAN NO CALL/COLL ACCOUNT OFFICER INITIALS
$56,000.00
07-25-2008
08-05-2013
452
086
--------------------------------------------------------------------------------
References in the boxes above are for Lender's use only and do not
limit the
applicability of this document to any particular loan or item. Any
item above
containing "- - - " has been omitted due to text length
limitations.
--------------------------------------------------------------------------------
GRANTOR:
AMERICAN CONSUMERS, INC., DBA SHOP RITE
LENDER: GATEWAY BANK & TRUST
55 HANNAH WAY
MAIN
ROSSVILLE, GA 30741
5102 ALABAMA HWY
RINGGOLD, GA 30736
(706) 965-5500
================================================================================
THIS
COMMERCIAL
SECURITY
AGREEMENT
dated July 25, 2008, is made and executed
between
AMERICAN
CONSUMERS,
INC. DBA SHOP RITE ("Grantor") and GATEWAY BANK &
TRUST ("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor
grants to Lender
a security interest in the Collateral to secure the Indebtedness
and agrees that
Lender
shall
have the
rights
stated in this
Agreement
with
respect to the
Collateral, in addition to all other rights which Lender may have
by law.
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 ALL
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.
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 Keogh accounts, or any trust
accounts
for which setoff would be prohibited by law. Grantor
authorizes
Lender, 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 Lender's
option,
to
administratively
freeze all such
accounts to allow Lender to protect
Lender's
charge and setoff rights provided in this paragraph.
GRANTOR'S
REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With
respect to the Collateral, Grantor represents and promises to
Lender that:
Perfection of Security
Interest.
Grantor agrees to take whatever
actions
are requested by Lender to perfect and continue
Lender's security interest
in the Collateral.
Upon request of Lender,
Grantor will deliver to Lender
any and all of the documents evidencing or constituting the
Collateral, and
Grantor
will note
Lender's
interest
upon any and all chattel
paper and
instruments if not delivered to Lender for possession by Lender.
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 Lender has received notice.
No Violation. The execution and delivery of this Agreement will not
violate
any law or agreement
governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not
prohibit any
term or condition of this Agreement.
Enforceability
of
Collateral.
To the extent the
Collateral
consists of
accounts, chattel paper, or general intangibles,
as defined by the Uniform
Commercial
Code,
the
Collateral is
enforceable
in accordance
with its
terms,
is
genuine,
and
fully
complies
with
all
applicable
laws and
regulations
concerning
form,
content
and
manner
of
preparation
and
execution, and all persons appearing to be obligated on the
Collateral have
authority and capacity to contract and are in fact obligated as
they appear
to be on the Collateral. There shall be no setoffs or counterclaims
against
any of the
Collateral,
and no agreement
shall have been made under which
any deductions or discounts may be claimed concerning the
Collateral except
those disclosed to Lender in writing.
Location of the
Collateral.
Except in the
ordinary
course of
Grantor's
business,
Grantor 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.
Transactions
Involving
Collateral.
Except for inventory sold or accounts
collected in the ordinary
course of
Grantor's
business,
or as otherwise
provided for in this Agreement,
Grantor shall not sell,
offer to sell, or
otherwise transfer or dispose of the Collateral.
Grantor shall not pledge,
mortgage,
encumber or otherwise permit the Collateral to be subject to any
lien, security interest,
encumbrance,
or charge,
other than the security
interest provided for in this Agreement,
without the prior written consent
of Lender.
This includes security interests even if junior in right to the
security
interests granted under this Agreement.
Unless waived by Lender,
all proceeds from any disposition of the Collateral
(for whatever
reason)
shall be held in trust for
Lender
and shall
not be
commingled
with any
other
funds;
provided
however,
this
requirement
shall not
constitute
consent by Lender to any sale or other disposition.
Upon receipt,
Grantor
shall immediately deliver any such proceeds to Lender.
Title.
Grantor
represents
and warrants to Lender that Grantor holds good
and
marketable
title to the
Collateral,
free and clear of all liens and
encumbrances except for the lien of this Agreement.
No financing statement
covering any of the
Collateral
is on file in any public office other than
those which reflect the security
interest
created by this Agreement or to
which Lender has
specifically
consented.
Grantor
shall defend
Lender's
rights in the
Collateral
against
the
claims
and
demands
of all other
persons.
Repairs and Maintenance.
Grantor agrees to keep and maintain, and to cause
others to keep and
maintain,
the
Collateral
in good
order,
repair and
condition
at all times
while this
Agreement
remains in effect.
Grantor
further agrees to pay when due all claims for work done
COMMERCIAL SECURITY AGREEMENT
(Continued)
Page 2
================================================================================
on, or services
rendered
or material
furnished
in
connection
with the
Collateral
so that no lien or
encumbrance
may ever attach to or be filed
against the Collateral.
Inspection of Collateral.
Lender and Lender'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
Lender's
interest
in the
Collateral
is not
jeopardized
in
Lender'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 Lender and shall satisfy any final adverse
judgment
before enforcement against the Collateral.
Grantor shall name Lender as an
additional
obligee
under
any
surety
bond
furnished
in
the
contest
proceedings.
Grantor
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
Lender's interest in the Collateral is not jeopardized.
Compliance with
Governmental
Requirements.
Grantor shall comply promptly
with all
laws,
ordinances,
rules
and
regulations
of all
governmental
authorities,
now or
hereafter
in effect,
applicable
to the
ownership,
production,
disposition,
or use of the Collateral,
including all laws or
regulations
relating
to the
undue
erosion
of
highly-erodible
land or
relating
to
the
conversion
of
wetlands
for
the
production
of
an
agricultural
product or
commodity.
Grantor may contest in good faith any
such law,
ordinance
or
regulation
and
withhold
compliance
during any
proceeding,
including appropriate appeals, so long as Lender's interest in
the Collateral, in Lender's opinion, is not jeopardized.
Hazardous
Substances.
Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement
remains a lien
on the Collateral,
used in violation of any Environmental
Laws or for the
generation,
manufacture,
storage,
transportation,
treatment,
disposal,
release
or
threatened
release
of
any
Hazardous
Substance.
The
representations and warranties
contained herein are based on Grantor's due
diligence in investigating the Collateral for Hazardous Substances.
Grantor
hereby
(1)
releases
and
waives any
future
claims
against
Lender for
indemnity or
contribution
in the event Grantor becomes liable for cleanup
or other costs under any
Environmental
Laws, and (2) agrees to indemnify,
defend,
and hold
harmless
Lender
against
any and all claims and losses
resulting
from
a
breach
of
this
provision
of
this
Agreement.
This
obligation
to
indemnify
and
defend
shall
survive
the
payment of the
Indebtedness and the satisfaction of this Agreement.
Maintenance of Casualty
Insurance.
Grantor shall procure and maintain all
risks
insurance,
including
without
limitation fire, theft and liability
coverage
together
with such other
insurance
as Lender may require
with
respect to the Collateral, in form, amounts, coverages and basis
reasonably
acceptable
to
Lender
and
issued by a company
or
companies
reasonably
acceptable
to Lender.
Grantor,
upon
request of Lender,
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
and
not
including
any
disclaimer
of the
insurer's
liability
for failure to give such a notice.
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 Grantor
or any other person.
In connection
with all policies
covering
assets in
which Lender holds or is offered a security interest,
Grantor will provide
Lender with such loss payable or other
endorsements as Lender may require.
If
Grantor
at any time
fails to
obtain or
maintain
any
insurance
as
required under this
Agreement,
Lender may (but shall not be obligated to)
obtain such insurance as Lender deems
appropriate,
including if Lender so
chooses
"single
interest
insurance,"
which
will
cover
only
Lender's
interest in the Collateral.
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
Reserves.
Lender may require
Grantor to
maintain
with Lender
reserves for payment of insurance premiums, which reserves shall be
created
by
monthly
payments
from
Grantor
of a sum
estimated
by
Lender to be
sufficient
to produce,
at least
fifteen (15) days before the premium due
date,
amounts at least
equal to the
insurance
premiums
to be paid.
If
fifteen
(15)
days
before
payment
is
due,
the
reserve
funds
are
insufficient,
Grantor shall upon demand pay any deficiency to Lender.
The
reserve
funds
shall be held by
Lender
as a
general
deposit
and shall
constitute
a
non-interest-bearing
account
which
Lender may
satisfy by
payment of the
insurance
premiums
required to be paid by Grantor as they
become due.
Lender does not hold the reserve
funds in trust for
Grantor,
and
Lender
is not the
agent of
Grantor
for
payment
of the
insurance
premiums required to be paid by Grantor. The responsibility for the
payment
of premiums shall remain Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, 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.
Financing
Statements.
Grantor
authorizes
Lender to file a UCC financing
statement,
or alternatively,
a copy of this Agreement to perfect Lender's
security interest. At Lender's request, Grantor additionally agrees
to sign
all other
documents that are necessary to perfect,
protect,
and continue
Lender's
security
interest in the
Property.
Grantor will pay all filing
fees,
title
transfer
fees,
and
other
fees and costs
involved
unless
prohibited
by law or unless Lender is required by law to pay such fees and
costs.
Grantor irrevocably
appoints Lender to execute documents necessary
to
transfer
title if there is a
default.
Lender may file a copy of this
Agreement as a financing
statement.
If Grantor changes
Grantor's name or
address,
or the name or address of any person granting a security interest
under this Agreement
changes,
Grantor will promptly
notify the Lender of
such change.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have
possession of the
tangible
personal property and beneficial use of all the Collateral and may
use
it in any lawful
manner not
inconsistent
with this
Agreement
or the Related
Documents,
provided that Grantor's right to possession and beneficial use
shall
not apply to any
Collateral
where
possession
of the
Collateral by Lender is
required by law to perfect Lender's
security
interest in such
Collateral.
If
Lender at any time has possession of any Collateral,
whether before or after an
Event of Default,
Lender shall be deemed to have exercised
reasonable
care in
the custody and
preservation
of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, in Lender's
sole discretion,
shall deem appropriate under the circumstances, but failure to
honor any request
by Grantor shall not of itself be deemed to be a failure to
exercise
reasonable
care.
Lender shall not be required to take any steps
necessary to preserve any
rights in the
Collateral
against prior
parties,
nor to protect,
preserve or
maintain any security interest given to secure the Indebtedness.
LENDER'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
Lender may be
entitled upon Default.
DEFAULT.
Each of the following shall
constitute an Event of Default under this
Agreement:
Payment
Default.
Grantor
fails
to
make
any payment when due under the
Indebtedness.
Other Defaults.
Grantor 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
Grantor.
COMMERCIAL SECURITY AGREEMENT
(Continued)
Page 3
================================================================================
Default in Favor of Third Parties.
Any guarantor or 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
guarantor's
or Grantor's
property or
ability to 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 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 Lender.
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 Lender
written
notice of the
creditor or
forfeiture
proceeding
and deposits
with Lender
monies or a
surety
bond
for the
creditor
or
forfeiture
proceeding,
in an
amount
determined by Lender, in its sole discretion,
as being an adequate reserve
or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect
to any Guarantor of any of the
Indebtedness
or 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 Lender believes the prospect of payment or
performance of the
Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
RIGHTS
AND
REMEDIES
ON
DEFAULT.
If an Event of
Default
occurs
under this
Agreement, at any time thereafter, Lender shall have all the rights
of a secured
party
under the
Georgia
Uniform
Commercial
Code.
In
addition
and without
limitation,
Lender may
exercise
any one or more of the
following
rights and
remedies:
Accelerate
Indebtedness.
Lender
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.
Assemble Collateral. Lender may require Grantor to deliver to
Lender all or
any portion of the
Collateral
and any and all
certificates
of title and
other documents
relating to the Collateral.
Lender may require Grantor to
assemble
the
Collateral
and make it available to Lender at a place to be
designated
by Lender.
Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the
Collateral. If the
Collateral
contains
other goods not covered by this Agreement at the time
of repossession,
Grantor agrees Lender may take such other goods, provided
that
Lender
makes
reasonable
efforts to return
them to
Grantor
after
repossession.
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.
Lender'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 Lender 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
Lender's
discretion
transfer
any
Collateral
into Lender's own name or that of Lender'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,
Lender 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, Lender may notify account
debtors
and obligors on any Collateral to make payments directly to Lender.
Obtain Deficiency.
If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment
against Grantor for any deficiency
remaining
on the Indebtedness due to Lender after application of all amounts
received
from the exercise of the rights provided in this
Agreement.
Grantor shall
be
liable
for a
deficiency
even if the
transaction
described
in this
subsection is a sale of accounts or chattel paper.
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 Lender 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 Grantor's failure to perform, shall not affect
Lender's right to declare a default and exercise its remedies.
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.
Grantor
agrees
to pay
upon
demand
all of
Lender's
costs
and
expenses,
including
Lender's
attorneys'
fees
and
Lender's legal
expenses,
incurred in connection
with the
enforcement of
this
Agreement.
Lender may hire or pay someone
else to help enforce this
Agreement,
and
Grantor
shall
pay
the
costs
and
expenses
of
such
enforcement.
Costs and expenses include Lender's attorneys' fees and legal
expenses whether or not there is a lawsuit,
including
attorneys' fees and
legal expenses for bankruptcy
proceedings
(including efforts to modify or
vacate any automatic
stay or
injunction),
appeals,
and any
anticipated
post-judgment
collection services.
Grantor 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.
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 Lender in the State of Georgia.
No Waiver by Lender.
Lender
shall not be deemed to have waived any rights
under this
Agreement
unless such waiver is given in writing and signed by
Lender.
No delay or omission on the part of Lender in exercising any right
shall
operate
as a waiver of such right or any other
right.
A waiver by
Lender of a provision of this 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
Lender,
nor any
course of
dealing
between
Lender
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
COMMERCIAL SECURITY AGREEMENT
(Continued)
Page 4
================================================================================
granted or
withheld
in
the
sole
discretion
of
Lender.
Notices.
Any notice
required
to be given under this
Agreem
