Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FVg2JZdym5Y/aJbI5v74apQZZHQYUkMBWHo+sJZAWAEA0X4UvHOqJZP8V/y0xd+W hYu84ab6MXzBiZRCfhS4ZQ== 0000922907-08-000543.txt : 20080731 0000922907-08-000543.hdr.sgml : 20080731 20080731170718 ACCESSION NUMBER: 0000922907-08-000543 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080725 ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080731 DATE AS OF CHANGE: 20080731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CONSUMERS INC CENTRAL INDEX KEY: 0000004811 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 581033765 STATE OF INCORPORATION: GA FISCAL YEAR END: 0529 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05815 FILM NUMBER: 08982582 BUSINESS ADDRESS: STREET 1: PO BOX 2328 STREET 2: 418A BATTLEFIELD PKWY CITY: FORT OGLETHORPE STATE: GA ZIP: 30742 BUSINESS PHONE: 7068613347 MAIL ADDRESS: STREET 1: P O BOX 2328 STREET 2: 418-A BATTLEFIELD PARKWAY CITY: FORT OGLETHORPE STATE: GA ZIP: 30742 8-K 1 form8k_073108.htm Form 8-K



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ________________________

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


         Date of Report (Date of earliest event reported): July 25, 2008


                            AMERICAN CONSUMERS, INC.
             (Exact name of registrant as specified in its charter)


        Georgia                     0-5815                      58-1033765
    (State or other              (Commission                 (I.R.S. Employer
     jurisdiction                File Number)               Identification No.)
   of incorporation)


  55 Hannah Way, Rossville, Georgia                               30741
  (Address of principal executive offices)                     (zip code)

Registrant's telephone number, including area code:  (706) 861-3347

                                       N/A
         (Former name or former address, if changed since last report.)



Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

    Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)

    Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

    Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17 CFR 240.14d-2(b))

    Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240.13e-4(c))



Item 2.03.  Creation of a Direct Financial  Obligation or an Obligation under an
            Off-Balance Sheet Arrangement of a Registrant.

     On July 25, 2008, American Consumers, Inc. (the "Company") executed two (2)
new  promissory  notes (the  "Notes") to provide  financing  for the  previously
announced  purchase and installation of new cash register  hardware and software
and scanning equipment for the Company's Chickamauga,  Georgia grocery store and
the Company's Stevenson, Alabama grocery store. The Notes, which have an initial
principal  balance  of  $56,000  each,  were  entered  into  with the  Company's
principal lender,  Gateway Bank & Trust Company ("Gateway"),  in accordance with
the previously  announced  commitment letter between the Company and Gateway for
the partial funding of these purchases.  The commitment letter calls for Gateway
to provide up to $440,000 of financing in the form of five year term loans, with
interest at the Wall Street  Journal Prime Rate plus 0.5% per annum and interest
and  principal  payable on a five-year  amortization  schedule.  The  commitment
letter  also  provides  for an  origination  fee  equal to 0.75% of the  amounts
advanced, and provides that the debt will be secured by a first priority lien on
the new  equipment  in  addition to being  cross-collateralized  with all of the
Company's other indebtedness to Gateway.

     In  accordance  with these  terms,  the Company  paid  origination  fees to
Gateway of $840 ($420 for each Note) in connection  with this  funding.  Each of
the Notes must be repaid in sixty (60) monthly payments of $1,086.86,  beginning
on September 05, 2008 with final payment due on August 05, 2013.  The Notes bear
an annual  interest rate at .500 points over the Wall Street Journal Prime Rate,
adjusted each month, and subject to a floor rate of 6.00%,  which is the initial
effective  interest rate as of July 25, 2008. The Notes are  collateralized by a
security  interest in the  Company's  $300,000  certificate  of deposit with the
Lender and by a security  interest in the register system and  substantially all
of  the  Company's  accounts  receivable,  inventory,  machines  and  equipment,
furniture and fixtures,  and proceeds of the  foregoing,  as well as by personal
guarantees of the Company's  President and CEO and its Executive  Vice President
and  CFO.  The  Notes  are  cross-collateralized  and  cross-defaulted  with the
Company's other existing indebtedness to Gateway.

     The Notes include  affirmative and negative covenants and Events of Default
which are  customary  for this type of  indebtedness  and the  related  security
documents  require the Company to provide  insurance on the register  system and
business assets. The foregoing description of the Notes and the related security
documents is qualified by reference to the full text of the documents, which are
filed as exhibits to this report.

Item 9.01.  Financial Statements and Exhibits

The following Exhibits are filed pursuant to Item 9 of this Report:

Exhibit No.         Description

   10.37            Terms Sheet  Letter  between the Company and Gateway  Bank &
                    Trust  Company,  dated as of  February  7,  2008,  regarding
                    commitment  under which first  borrowing was initiated  July
                    25, 2008. Filed herewith.



   10.38            Two  Promissory  Notes for $56,000  each between the Company
                    and Gateway Bank & Trust Company, dated as of July 25, 2008.
                    Filed herewith.

   10.39            Commercial  Security  Agreements  between  the  Company  and
                    Gateway  Bank  &  Trust  Company   related  to  Two  $56,000
                    Promissory Notes dated as of July 25, 2008. Filed herewith.

   10.40            Assignments  of Deposit  Account  between  the  Company  and
                    Gateway  Bank  &  Trust  Company   related  to  Two  $56,000
                    Promissory Notes dated as of July 25, 2008. Filed herewith.



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


Date:  July 31, 2008                   AMERICAN CONSUMERS, INC.


                                       By:   /s/ Paul R. Cook
                                          --------------------------------
                                             Paul R. Cook
                                             Chief Financial Officer

EX-10.37 2 form8kexh1037_073108.htm Exhibit 10.37



EXHIBIT 10.37


[Gateway Bank & Trust Logo]




February 7, 2008


American Consumers, Inc.
55 Hannah Way
Rossville, GA  30741

Gentlemen:

Gateway  Bank & Trust (the  "Bank") is pleased to approve  your loan  request to
provide a credit facility, not to exceed a total of $440,000.00 consisting of:

     A term loan (the "Term Loan" which can also mean a series of smaller  loans
     in the  aggregate) in an amount not to exceed  $440,000.00 to purchase cash
     registers and/or a point of sale system as represented to the Bank.

The Term Loan shall be subject to the terms and conditions set forth herein.

(1)  Borrower:

     The  Borrower on the Term Loan shall be  American  Consumers,  Inc.,  doing
     business as Shop Rite.

(2)  Basic terms of the Term Loan:

     (a)  The term shall be 5 years.

     (b)  Interest  shall  accrue at a variable  rate based on the Prime Rate as
          set forth in the Wall Street Journal,  plus a margin of 0.50%.  Today,
          that rate is 6.50% (Prime 6.00 plus 0.50%),  and the rate shall change
          monthly with changes in the Prime Rate.

     (c)  Monthly  payments of principal  and interest will be based on a 5-year
          amortization period.


P.O. Box 129 * 5102 Alabama  Highway * Ringgold,  Georgia 30736 * (706) 965-5500



(3)  Origination Fees:

     Borrower shall pay to Bank, at closing of the Term Loan, an origination fee
     equal to 0.75% of the note amount.

(4)  Use of Proceeds and Advances:

     The  proceeds  of the Term Loan  shall be used to  purchase a point of sale
     system and cash registers to be used in each of your eight  locations.  The
     proceeds  can be loaned in the form of one note or a series of notes,  with
     aggregate not to exceed $440,000.00.

(5)  Collateral:

     The Term Loan shall be secured by a first  priority  assignment  and UCC on
     the registers to be purchased with the proceeds of this credit,  along with
     all attachments,  accessories,  parts,  contracts,  and items pertaining to
     such. This term loan will also be cross-collateralized  with the collateral
     that secures other debt owed to the Bank,  including all of the  Borrower's
     accounts receivable, cash flow, accounts, inventory,  furniture,  fixtures,
     equipment, machinery, leasehold improvements,  computers, office equipment,
     cash  registers,  and generally all business  assets now owned or hereafter
     acquired.  The bank also has an Assignment of a $300,000.00  CD,  currently
     held at the Bank as additional  collateral.  Personal guaranties of Michael
     Richardson and P.R. Cook also required.

(6)  Documentation Expenses/Closing Costs:

     The  Borrower  shall  pay all fees  and  expenses  incurred  by the Bank in
     properly  documenting the facility identified herein, as well as other fees
     and  expenses  incurred  by  the  Bank,  including,  but  not  limited  to,
     attorney's fees,  appraisal fees, title insurance  premiums,  environmental
     assessments,   survey  costs,   engineering   and  inspection  fees  (where
     applicable).  Borrower shall pay all such expenses  incurred whether or not
     the Term Loan closes.

(7)  Loan Conditions and Covenants:

     (a)  The Borrower shall provide to the Bank quarterly financial statements,
          certified  by the Chief  Financial  Officer  of the  Borrower,  within
          forty-five  (45) days after the end of each  calendar  quarter,  which
          statements  shall include balance sheets,  quarterly and  year-to-date
          income statements,  detailed Accounts Payable and Inventory  listings,
          and any other information requested by the Bank

     (b)  The Borrower  shall provide to the Bank annual  financial  statements,
          audited by an independent  certified public accounting firm acceptable
          to the Bank,  within  ninety (90) days after the end of each  calendar
          year,   which   statements   shall  include  balance  sheets,   income
          statements, and any other information requested by the Bank.

                                       2



     (c)  The Borrower shall not enter into any debt  obligation,  loan or lease
          arrangement,  with a value of $50,000.00 or greater without the bank's
          prior consent, which will not be unreasonably withheld.

     (d)  The  Borrower  shall  maintain  that the Bank is its  primary  bank of
          account,  as evidenced by operating  accounts,  reserve accounts,  and
          other ancillary bank products as needed.

(8) Expiration:

         This  commitment  shall  be null and  void  unless a copy of the  same,
         executed by the Borrower,  is returned to the Bank within ten (10) days
         hereof.  Thereafter,  the commitment shall expire with no obligation to
         the Bank.

(9)  Additional Requirements:

     (a)  Receipt of  appropriate  resolutions  and/or other such  documentation
          satisfactory  to the Bank's legal counsel  expressly  authorizing  the
          execution of all required loan documents.

     (b)  Evidence  of  general  and   professional   liability   and  workman's
          comprehensive  insurance coverage on all the facilities and activities
          of the Borrower, as well as hazard insurance coverage.

     (c)  The  accuracy  of  all  information,  representations,  and  materials
          submitted  with or in  support  of the  application  for  this  credit
          facitliy,  and the  failure of the  accuracy  thereof or any  material
          change therein, shall, at the option of the Bank, operate to terminate
          this commitment and all of the Bank's obligations hereunder.

     (d)  Continuing  compliance and performance by the Borrower with all of the
          conditions and requirements set forth herein.

     (e)  Continuing compliance with all applicable laws and regulations now, or
          hereafter  relating to this credit  facility and to the  operations of
          the Borrower's business as currently conducted.

     (f)  Neither this commitment nor the loan proceeds shall be assigned by the
          Borrower without prior written consent of the Bank, and any attempt at
          such assignment without the Bank's consent shall be void.

     (g)  No change in the provisions of this commitment shall be binding unless
          in writing and executed in the name of, and by an  authorized  officer
          of, the Bank.

                                       3



     (h)  Except as may be prohibited by applicable  laws and  regulations,  the
          Borrower shall establish and maintain cash management services for all
          of its operations and facilities through the Bank.

This letter sets forth the general terms and conditions of the credit  facility,
but is not intended to be exhaustive.  The  collateral  documents to be executed
shall contain the agreements  and  requirements  set forth herein,  and may also
contain such other agreements,  covenants and requirements as may be required by
the Bank  and/or  determined  by the Bank's  legal  counsel to be  necessary  to
evidence the Term Loan and the Bank's security interests.

Please  indicate your  acceptance of the terms and  conditions set forth herein,
subject to the  negotiation  and  execution  of mutually  acceptable  definitive
agreements  embodying  such terms and conditions by signing and returning a copy
of this commitment letter.

Sincerely

/s/ Jeff A. Bridgman

Jeff A. Bridgman
Vice President


We hereby  accept the above terms and  conditions  as  proposed,  subject to the
negotiation  and  execution  of mutually  acceptable  definitive  agreements  on
substantially the terms set forth herein this 8th day of February, 2008.


                                       American Consumers, Inc.


                                       By:    /s/ Paul R. Cook
                                          --------------------------------
                                       Name:  Paul R. Cook
                                       Title: Vice President

                                       4

EX-10.38 3 form8kexh1038_073108.htm Exhibit 10.83

EXHIBIT 10.38

PROMISORY NOTE

- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------

BORROWER: 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

================================================================================
Principal Amount: $56,000.00 Date of Note: July 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 Fifty-Six Thousand & 00/100 Dollars
($56,000.00), together with interest on the unpaid principal balance from July
25, 2008, until paid in full.

PAYMENT. Subject to any payment changes resulting from change in the Index,
Borrower will pay this loan in 60 payments of $1,086.86 each payment. Borrower's
first payment is due September 5, 2008, and all subsequent payments are due on
the same day of each month after that. Borrower's final payment will be due on
August 5, 2013, and will be for all principal and all accrued interest not yet
paid. Payments include principal and interest. 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. Borrower will pay Lender at Lender'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 Prime Rate (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 Borrower'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 5.000% per annum. The interest rate to be applied to the unpaid
principal balance of this Note will be calculated as described in the "INTEREST
CALCULATION METHOD" paragraph using a rate of 0.500 percentage points over the
Index, adjusted if necessary for any minimum and maximum rate limitations
described below, resulting in an initial annual rate of simple interest, based
on a year of 360 days, 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. Whenever increases occur in the interest
rate, Lender, at its option, may do one or more of the following: (A) increase
Borrower's payments to ensure Borrower's loan will pay off by its original final
maturity date, (B) increase Borrower's payments to cover accruing
interest,(C)increase the number of Borrower's payments, and (D) continue
Borrower's payments at the same amount and increase Borrower's final payment.

INTEREST CALCULTION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the 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. All interest payable under
this Note is computed using this method.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is entitled to a
minimum interest charge of $ 10.00. Other than Borrower'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 Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments under the payment schedule. Rather, early payments will reduce
the principal balance due and may result in Borrower's making fewer payments.
Borrower agrees not to send Lender payments marked "paid in full", "without
recourse", or similar language. If Borrower sends such a payment, Lender may
accept it without losing any of Lender'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, 5102 Alabama Hwy, Ringgold, GA 30736.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
10.000% of the unpaid portion of the regularly scheduled payment or $10.00,
whichever is greater, 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.

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 Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower'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 Borrower's accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Borrower 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 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 Lender 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, Lender 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, Lender'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, Borrower 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 Lender in the State of Georgia.

PROMISSORY NOTE
(Continued) Page 2

================================================================================

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 Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower 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.

COLLATERAL. Borrower acknowledges this Note is secured by 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; CD#22032118 CARRIED WITH GATEWAY BANK AND TRUST WITH THE
APPROXIMATE BALANCE OF $307,900.32.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns,

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 Lender'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 Lender 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/ Michael A. Richardson (Seal) By: /s/ Paul R. Cook (Seal)
-------------------------------------- ----------------------------------------
MICHAEL A. RICHARDSON, President of PAUL R. COOK, Chief Financial Officer of
AMERICAN CONSUMERS, INC. DBA SHOP RITE AMERICAN CONSUMERS, INC. DBA
SHOP RITE

PROMISORY NOTE

BORROWER: 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

================================================================================
Principal Amount: $56,000.00 Date of Note: July 25, 2008

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.

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 Lender 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, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.

PROMISSORY NOTE
(Continued) Page 2

================================================================================

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

EX-10.39 4 form8kexh1039_073108.htm Exhibit 10.39

EXHIBIT 10.39

COMMERCIAL SECURITY AGREEMENT

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

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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

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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, Grantor agrees to keep Lender informed at all times of
Grantor's current address. Unless otherwise provided or required by law, if
there is more than one Grantor, any notice given by Lender to any Grantor
is deemed to be notice given to all Grantors.

Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect, amend, or to continue the security interest granted in this
Agreement or to demand termination of filings of other secured parties.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lender's security interest in the
Collateral.

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.

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 Grantor'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.

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:

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.

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 of Grantor's right, title and
interest in and to all the Collateral as described in the Collateral
Description section of this Agreement.

Default. The word "Default" means the Default set forth in this Agreement
in the section titled "Default".

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
("SARA"), 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.

Grantor. The word "Grantor" means AMERICAN CONSUMERS, INC. DBA SHOP RITE.

Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Indebtedness.

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
Grantor is responsible under this Agreement or under any of the Related
Documents. Specifically, without limitation, Indebtedness includes all
amounts that may be indirectly secured by the Cross-Collateralization
provision of this Agreement.

Lender. The word "Lender" means GATEWAY BANK & TRUST, its successors and
assigns.

Note. The word "Note" means the Note executed by AMERICAN CONSUMERS, INC.
DBA SHOP RITE in the principal amount of $56,000.00 dated July 25, 2008,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the note or
credit agreement.

Property. The word "Property" means all of Grantor's right, title and
interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.

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 Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 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.

GRANTOR: