1
EXHIBIT 10.20
- -----------------------------------------------------------------------------------------------------------------------------------
Brister's Thunder Kart's Inc
- ---------------------------------------------------------------------
PO Box 324 DEPOSIT GUARANTY NATIONAL BANK
- --------------------------------------------------------------------- HWY. 16 WEST
Roseland LA 70456-0324 AMITE, LA. 70422
- ---------------------------------------------------------------------
72-0797992
- ---------------------------------------------------------------------
DEBTOR'S NAME, ADDRESS AND SSN OR TIN SECURED PARTY'S NAME AND ADDRESS
("I" means each Debtor who signs.) ("You" means the Secured Party, its successors and assigns.)
- -----------------------------------------------------------------------------------------------------------------------------------
I am entering into this security agreement with you on AUGUST 13, 1996 (date).
SECURED DEBTS. I agree that this security agreement will secure the payment and
performance of the debts, liabilities or obligations described below
that (Check one) [ ] | [X] (name) KARTS INTERNATIONAL, INC. owe(s) to
you now or in the future: (Check one below):
[X] SPECIFIC DEBT(S). The debt(s), liability or
obligations evidenced by (describe): BRISTER'S
THUNDER KARTS, INC. and all extensions, renewals,
refinancings, modifications and replacements of the
debt, liability or obligation.
[ ] ALL DEBT(S). Except in those cases listed in the
"LIMITATIONS" paragraph on page 2, each and every
debt, liability and obligation of every type and
description (whether such debt, liability or
obligation now exists or is incurred or created in
the future and whether it is or may be direct or
indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or
unliquidated, or joint, several or joint and
several).
SECURITY INTEREST. To secure the payment and performance of the above described
Secured Debts, liabilities and obligations, I give you a security
interest in all of the property described below that I now own and that
I may own in the future (including, but not limited to, all parts,
accessories, repairs, improvements, and accessions to the property),
wherever the property is or may be located, and all proceeds and
products from the property.
[ ] DEPOSIT ACCOUNTS: All deposit accounts in which I have an
interest and which are held in your institution. This security
interest does not apply if the deposit account: (a) is an IRA
or a tax-deferred retirement account; (b) the debt is created
by a consumer credit transaction under a credit card plan; or
(c) my right of withdrawal arises only in a representative
capacity.
[ ] INVENTORY: All inventory which I hold for ultimate sale or
lease, or which has been or will be supplied under contracts
of service, or which are raw materials, work in process, or
materials used or consumed in my business.
[ ] EQUIPMENT: All equipment including, but not limited to, all
machinery, vehicles, furniture, fixtures, manufacturing
equipment, farm machinery and equipment, shop equipment,
office and recordkeeping equipment, and parts and tools. Any
equipment described in a list or schedule which I give to you
will also be included in the secured property, but such a list
is not necessary for a valid security interest in my
equipment.
[ ] Farm Products: All farm products including, but not limited to:
(a) all poultry and livestock and their young, along with
their products and produce;
(b) all harvested crops, annual or perennial, and all
products of the crops; and
(c) all feed, seed, fertilizer, medicines, and other
supplies used or produced in my farming operations.
[ ] ACCOUNTS, INSTRUMENTS, DOCUMENTS, CHATTEL PAPER AND OTHER
RIGHTS TO PAYMENT: All rights I have now and that I may have
in the future to the payment of money including, but not
limited to:
(a) payment for goods sold or leased or for services
rendered, whether or not I have earned such payment
by performance; and
(b) rights to payment arising out of all present and
future debt instruments, chattel paper and loans and
obligations receivable.
The above include any rights and interests (including all
liens and security interests) which I may have by law or
agreement against any account debtor or obligor of mine.
[ ] GENERAL INTANGIBLES: All general intangibles including, but
not limited to, tax refunds, applications for patents,
patents, copyrights, trademarks, trade secrets, good will,
trade names, customer lists, permits and franchises, and the
right to use my name.
[ ] GOVERNMENT PAYMENTS AND PROGRAMS: All payments, accounts,
general intangibles, or other benefits (including, but not
limited to, payments in kind, deficiency payments, letters of
entitlement, warehouse receipts, storage payments, emergency
assistance payments, diversion payments, and conservation
reserve payments) in which I now have and in the future may
have any rights or interest and which arise under or as a
result of any preexisting, current or future Federal or state
governmental program (including, but not limited to, all
programs administered by the Commodity Credit Corporation and
the ASCS).
[X] THE SECURED PROPERTY INCLUDES, BUT IS NOT LIMITED BY, THE
FOLLOWING:
BLANKET ACCOUNTS RECEIVABLES IN THE NAME
OF SAM'S CLUB
If this agreement covers collateral requiring a legal description, that
description is:
I am a(n) [ ] individual [ ] partnership [X] corporation I AGREE TO THE TERMS SET OUT ON PAGES 1 AND 2 OF THIS
AGREEMENT. I have received a copy of this document on
[ ] today's date.
------------------------------------------------
[ ] If checked, file this agreement in the real estate records.
Record Owner (if not me): Brister's Thunder Kart's Inc
------------------------------------------- ------------------------------------------------------------
(Debtor's name)
- ---------------------------------------------------------------------
.
- -------------------------------------------------------------------- /s/ V. LYNN GRAYBILL
------------------------------------------------------------
(Debtor's name)
The property will be used for [ ] personal [ ] business
[ ] agricultural [ ] reasons.
DEPOSIT GUARANTY NATIONAL BANK By:
- --------------------------------------------------------------------- ---------------------------------------------------------
(Secured Party's Name) Title:
------------------------------------------------------
By:
------------------------------------------------------------------ By:
---------------------------------------------------------
Title: Title:
--------------------------------------------------------------- ------------------------------------------------------
(page 1 of 2)
2
GENERALLY - "You" means the Secured Party identified on page 1 of this
agreement. "I," "me" and "my" means each person who signs this security
agreement as Debtor and who agrees to give the property described in this
agreement as security for the Secured Debts. All terms and duties under this
agreement are joint and individual. No modification of this security agreement
is effective unless made in writing and signed by you and me. This security
agreement remains in effect, even if the note is paid and I owe no other debt
to you, until discharged in writing. Time is of the essence in this agreement.
APPLICABLE LAW - I agree that this security agreement will be governed by the
law of the state of Louisiana. If property described in this agreement is
located in another state, this agreement may also, in some circumstances, be
governed by the law of the state in which the property is located.
To the extent permitted by law, the terms of this agreement may vary applicable
law. If any provision of applicable law may not be varied by agreement, any
provision of this agreement that does not comply with that law will not be
effective. If any provision of this agreement cannot be enforced according to
its terms, this fact will not affect the enforceability of the remainder of
this agreement.
OWNERSHIP AND DUTIES TOWARD PROPERTY - I represent that I own all of the
property, or to the extent this is a purchase money security interest I will
acquire ownership of the property with the proceeds of the loan. I will defend
it against any other claim. Your claim to the property is ahead of the claims
of any other creditor. I agree to do whatever you require to protect your
security interest and to keep your claim in the property ahead of the claims of
other creditors. I will not do anything to harm your position.
I will keep books, records and accounts about the property and my business in
general. I will let you examine these records at any reasonable time. I will
prepare any report or accounting you request, which deals with the property.
I will keep the property in my possession and will keep it in good repair and
use it only for the purpose(s) described on page 1 of this agreement. I will
not change this specified use without your express written permission. I
represent that I am the original owner of the property and, if I am not, that I
have provided you with a list of prior owners of the property.
I will keep the property at my address listed on page 1 of this agreement,
unless we agree I may keep it at another location. If the property is to be
used in another state, I will give you a list of those states. I will not try
to sell the property unless it is inventory or I receive your written
permission to do so. If I sell the property I will have the payment made
payable to the order of you and me.
You may demand immediate payment of the debt(s) if the debtor is not a natural
person and without your prior written consent (1) a beneficial interest in the
debtor is sold or transferred or (2) there is a change in either the identity
or number of members of a partnership or (3) there is a change in ownership of
more than 25 percent of the voting stock of a corporation.
I will pay all taxes and charges on the property as they become due. You have
the right of reasonable access in order to inspect the property. I will
immediately inform you of any loss or damage to the property.
LIMITATIONS - This agreement will not secure a debt described in the section
entitled "Secured Debts" on page 1:
1) if you fail to make any disclosure of the existence of this
security interest required by law for such other debt;
2) if this security interest is in my principal dwelling and you
fail to provide (to all persons entitled) any notice of right
of rescission required by law for such other debt;
3) to the extent that this security interest is in "household
goods" and the other debt to be secured is a "consumer" loan
(as those terms are defined in applicable federal regulations
governing unfair and deceptive credit practices);
4) if this security interest is in margin stock subject to the
requirements of 12 C.F.R. Section 207 or 221 and you do not
obtain a statement of purpose if required under these
regulations with respect to that debt; or
5) if this security interest is unenforceable by law with respect
to that debt.
PURCHASE MONEY SECURITY INTEREST - For the sole purpose of determining the
extent of a purchase money security interest arising under this security
agreement: (a) payments on any non-purchase money loan also secured by this
agreement will not be deemed to apply to the purchase money loan, and (b)
payments on the purchase money loan will be deemed to apply first to the
non-purchase money portion of the loan, if any, and then to the purchase money
obligations in the order in which the items of collateral were acquired or if
acquired at the same time, in the order selected by you. No security interest
will be terminated by application of this formula. "Purchase money loan" means
any loan the proceeds of which, in whole or in part, are used to acquire any
collateral securing the loan and all extensions, renewals, consolidations, and
refinancings of such loan.
AUTHORITY OF SECURED PARTY TO MAKE ADVANCES AND PERFORM FOR DEBTOR - I agree to
pay you on demand any sums you advanced on my behalf including, but not limited
to, expenses incurred in collecting, insuring, conserving, or protecting the
property or in any inventories, audits, inspections or other examinations by
you in respect to the property. If I fail to pay such sums, you may do so for
me, adding the amount paid to the other amounts secured by this agreement. All
such sums will be due on demand and will bear interest at the highest rate
provided in any agreement, note or other instrument evidencing the Secured
Debt(s) and permitted by law at the time of the advance.
If I fail to perform any of my duties under this security agreement, or any
mortgage, deed of trust, lien or other security interest, you may without
notice to me perform the duties or cause them to be performed. I understand
that this authorization includes but is not limited to, permission to: (1)
prepare, file, and sign my name to any necessary reports or accountings; (2)
notify any account debtor of your interest in this property and tell the
account debtor to make the payments to you or someone else you name, rather
than me; (3) place on any chattel paper a note indicating your interest in the
property; (4) in my name, demand, collect, receive and give a receipt for,
compromise, settle, and handle any suits or other proceedings involving the
collateral; (5) take any action you feel is necessary in order to realize on
the collateral, including performing any part of a contract or endorsing it in
my name; and (6) make an entry on my books and records showing the existence of
the security agreement. Your right to perform for me shall not create an
obligation to perform and your failure to perform will not preclude you from
exercising any of your other rights under the law or this security agreement.
INSURANCE - I agree to buy insurance on the property against the risks and for
the amounts you require and to furnish you continuing proof of coverage. I will
have the insurance company name you as loss payee on any such policy. You may
require added security if you agree that insurance proceeds may be used to
repair or replace the property. I will buy insurance from a firm licensed to do
business in the state where you are located. The firm will be reasonably
acceptable to you. The insurance will last until the property is released from
this agreement. If I fail to buy or maintain the insurance (or fail to name you
as loss payee) you may purchase it yourself.
WARRANTIES AND REPRESENTATIONS - If this agreement includes accounts, I will
not settle any account for less than its full value without your written
permission. I will collect all accounts until you tell me otherwise. I will
keep the proceeds from all the accounts and any goods which are returned to me
or which I take back in trust for you. I will not mix them with any other
property of mine. I will deliver them to you at your request. If you ask me to
pay you the full price on any returned items or items retaken by myself, I will
do so.
If this agreement covers inventory, I will not dispose of it except in my
ordinary course of business at the fair market value for the property, or at a
minimum price established between you and me.
If this agreement covers farm products I will provide you, at your request, a
written list of the buyers, commission merchants or selling agents to or
through whom I may sell my farm products. In addition to those parties named on
this written list, I authorize you to notify at your sole discretion any
additional parties regarding your security interest in my farm products. I
remain subject to all applicable penalties for selling my farm products in
violation of my agreement with you and the Food Security Act. In this paragraph
the terms farm products, buyers, commission merchants and selling agents have
the meanings given to them in the Federal Food Security Act of 1985.
DEFAULT - I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) I change my name or assume an
additional name without first notifying you before making such a change; (9)
failure to plant, cultivate and harvest crops in due season; (10) if any loan
proceeds are used for a purpose that will contribute to excessive erosion of
highly erodible land or to the conversion of wetlands to produce an
agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G,
Exhibit M.
REMEDIES - If I am in default on this agreement, you have the following
remedies:
1) You may demand immediate payment of all I owe you under any
obligation secured by this agreement.
2) You may set off any obligation I have to you against any right
I have to the payment of money from you.
3) You may demand more security or new parties obligated to pay
any debt I owe you as a condition of giving up any other
remedy.
4) You may make use of any remedy you have under state or federal
law.
5) If I default by failing to pay taxes or other charges, you may
pay them (but you are not required to do so). If you do, I
will repay to you the amount you paid plus interest at the
highest contract rate.
6) You may repossess the property and sell it as provided by law.
You may apply what you receive from the sale of the property
to: your expenses; your reasonable attorneys' fees and legal
expenses (where not prohibited by law); any debt I owe you. If
what you receive from the sale of the property does not
satisfy the debts, you may take me to court to recover the
difference (where permitted by law).
I agree that 10 days written notice sent to my address listed
on page 1 by first class mail will be reasonable notice to me
under the Uniform Commercial Code.
If any items not otherwise subject to this agreement are
contained in the property when you take possession, you may
hold these items for me at my risk and you will not be liable
for taking possession of them.
7) In some cases, you may keep the property to satisfy the debt.
By choosing any one or more of these remedies, you do not waive your right to
later use any other remedy. You do not waive a default if you choose not to use
any remedy, and, by electing not to use any remedy, you do not waive your right
to later consider the event a default and to immediately use any remedies if it
continues or occurs again.
FILING - A carbon, photographic or other reproduction of this security
agreement or the financing statement covering the property described in this
agreement may be used as a financing statement where allowed by law. Where
permitted by law, you may file a financing statement which does not contain my
signature, covering the property secured by this agreement.
CO-MAKERS - If more than one of us has signed this agreement, we are all
obligated equally under the agreement. You may sue any one of us or any of us
together if this agreement is violated. You do not have to tell me if any term
of the agreement has not been carried out. You may release any co-signer and I
will still be obligated under this agreement. You may release any of the
security and I will still be obligated under this agreement. Waiver by you of
any of your rights will not affect my duties under this agreement. Extending
this agreement or new obligations under this agreement, will not affect my duty
under the agreement,
WAIVER/CONFESSION - I hereby waive the benefit of appraisal as provided in the
Louisiana Code of Civil Procedure, and all other laws with regard to appraisal
upon sales. For purposes of foreclosure under Louisiana executory process
procedures, I confess judgment in your favor up to the full amount of the Note,
in principal, interest, late charges, costs and attorney's fees, and in the
amount of all other funds which you may advance on my behalf for the
preservation of the secured property.
(page 2 of 2)