Exhibit 10.2


 


 





	COMMUNITY BANK
	                Partnership
    Banking'








 


  





COMMERCIAL SECURITY AGREEMENT


 





	
        Principal

        $10,000,000.00

         
	
        Loan Date

        05-11-2017
	
        Maturity 

        03-01-2019
	
        Loan No 

        155354101
	Call / Coll	
        Account

         600714
	f Officer

        765

         
	Initials
	References in the boxes above are for Lenders use only and do not limit the applicability of this document to any particular loan or item. 

Any item above containing "***" has been omitted due to text length limitations.










  


 


	Grantor:	
        BISCO INDUSTRIES,
        INC.

        1500 NORTH LAKEVIEW AVENUE

        ANAHEIM, CA 92807

         
	 	Lender:	
        COMMUNITY BANK

        ANAHEIM BRANCH

        2300 EAST KATELLA AVENUE, SUITE 125

        ANAHEIM, CA 92806

        (800) 788-9999

         






 


  


THIS COMMERCIAL SECURITY
AGREEMENT dated May 11, 2017, is made and executed between BISCO INDUSTRIES, INC. ("Grantor") and COMMUNITY
BANK ("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:


 


All inventory, Chattel
Paper, Accounts, Deposit Accounts, Equipment, Motor Vehicles, Instruments and General Intangibles; whether any of the foregoing
Is owned now or acquired later; all accessions, attachments, accessories, tools, parts, supplies, replacements of and additions
to any of the collateral described herein, whether added now or later; all products and produce of any of the property; all accounts,
general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, or other disposition
of any of the property; all proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any
of the property, 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; all records and data relating to any of the property, whether in the form of a writing,
photograph, microfilm, microfiche, or electronic media, together with all of debtor'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


 


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, tools, parts, supplies, 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.


 


FUTURE ADVANCES. In addition
to the Note, this Agreement secures all future advances made by Lender to Grantor regardless of whether the advances are made a)
pursuant to a commitment or b) for the same purposes.


 


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 Lenders 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.


 




     


     


    

 


COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 2


 


  


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. At the time any account becomes
subject to a security interest in favor of Lender, the account shall be a good and valid account representing an undisputed, bona
fide indebtedness incurred by the account debtor, for merchandise held subject to delivery instructions or previously shipped or
delivered pursuant to a contract of sale, or for services previously performed by Grantor with or for the account debtor. So long
as this Agreement remains in effect, Grantor shall not, without Lender's prior written consent, compromise, settle, adjust, or
extend payment under or with regard to any such Accounts. 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 (or to the extent the Collateral consists
of intangible property such as accounts or general intangibles, the records concerning 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, including the sales of inventory, Grantor shall not remove the Collateral
from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles, or other
titled property, Grantor shall not take or permit any action which would require application for certificates of title for the
vehicles outside the State of Illinois, 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. While Grantor
is not in default under this Agreement, Grantor may sell inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A sale in the ordinary course of Grantor's business does not
include a transfer in partial or total satisfaction of a debt or any bulk sale. 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 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.


 






     


     


    




COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 3


 


 



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 if the estimated cost of repair or replacement
exceeds $25,000.00, 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 fee& 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.


 


GRANTOR'S RIGHT TO POSSESSION
AND TO COLLECT ACCOUNTS. Until default and except as otherwise provided below with respect to accounts, 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.
Until otherwise notified by Lender, Grantor may collect any of the Collateral consisting of accounts. At any time and even though
no Event of Default exists, Lender may exercise its rights to collect the accounts and to notify account debtors to make payments
directly to Lender for application to the Indebtedness. 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.


 


REINSTATEMENT OF SECURITY
INTEREST. If payment is made by Grantor, whether voluntarily or otherwise, or by guarantor or by any third party, on the Indebtedness
and thereafter Lender is forced to remit the amount of that payment (A) to Grantor's trustee in bankruptcy or to any similar person
under any federal or state bankruptcy law or law for the relief of debtors, (B) by reason of any judgment, decree or order of any
court or administrative body having jurisdiction over Lender or any of Lender's property, or (C) by reason of any settlement or
compromise of any claim made by Lender with any claimant (including without limitation Grantor), the Indebtedness shall be considered
unpaid for the purpose of enforcement of this Agreement and this Agreement shall continue to be effective or shall be reinstated,
as the case maybe, notwithstanding any cancellation of this Agreement or of any note or other instrument or agreement evidencing
the Indebtedness and the Collateral will continue to secure the amount repaid or recovered to the same extent as if that amount
never had been originally received by Lender, and Grantor shall be bound by any judgment, decree, order, settlement or compromise
relating to the indebtedness or to this Agreement.


 


 






     


     


    




COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 4


 


 



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.


 


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 any 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.


 


Cure Provisions. If
any default, other than a default in payment, is curable and if Grantor has not been given a notice of a breach of the same provision
of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after Lender sends written notice
to Grantor demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably
practical.


 


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 Illinois 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.


 


Mortgagee In Possession.
Lender shall have the right to be placed as mortgagee in possession or 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 mortgagee in possession or 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 Lenders own name or that of Lenders 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.


 






     


     


    

 





COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 5


 


 



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.


 


COUNTERPARTS. This
agreement, document or instrument may be executed in any number of counterparts and by different parties on separate counterparts,
each of which when executed and delivered, shall be deemed to be an original and all of which taken together shall constitute one
and the same agreement, document or instrument. Delivery by facsimile or by electronic transmission in portable document format
(PDF) of an executed counterpart of this agreement, document or instrument is as effective as delivery of an originally executed
counterpart of this agreement, document or Instrument.


 


PRIOR COMMERCIAL SECURITY
AGREEMENT. This Commercial Security Agreement hereby amends and restates any prior Commercial Security Agreement, along
with all modification(s) and amendment(s) thereto executed by Borrower.


 


JUDICIAL REFERENCE.
Borrower and Lender agree that any dispute, action, proceeding or hearing ("Dispute") arising out of, or relating
to, this Agreement shall be determined by a consensual general judicial reference pursuant to the provisions of California Code
of Civil Procedure Section 638 et seq.; as such statutes may be amended or modified from time to time. Upon a written request,
or upon an appropriate motion by either party to this Agreement, any pending action relating to any Dispute and every Dispute shall
be heard by a retired judge or justice of the courts of the State of California or a federal court judge (the "Referee"),
who shall try all issues (including any and all questions of law and questions of fact relating thereto), and issue findings of
fact and conclusions of law and report a statement of decision. The Referee's statement of decision will constitute the conclusive
determination of the Dispute. Borrower and Lender agree that the Referee shall have the power to issue all legal and equitable
relief appropriate under the circumstances before him/her in the same manner as would a judge sitting without a jury.


 


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. With
respect to procedural matters related to the perfection and enforcement of Lender's rights against the Collateral, 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 Illinois.
In all other respects, 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 California without regard to Its conflicts of law provisions. However, if there ever is a
question about whether any provision of this Agreement is valid or enforceable, the provision that is questioned will be governed
by whichever state or federal law would find the provision to be valid and enforceable. The loan transaction that is evidenced
by the Note and this Agreement has been applied for, considered, approved and made, and all necessary loan documents have been
accepted by Lender in the State of California.


 


Choice of Venue. If
there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of ORANGE County, State of
California.


 


No Waiver by Lender.
Lender shell 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 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.


 











     


     


    

 





COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 6


 






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.


 




     


     


    

 





COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 7


 


 


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 BISCO INDUSTRIES, INC. 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.,
ihe Resource conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable stale ❑r 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
BISCO INDUSTRIES, INC.


 


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 the future advances set forth in the Future Advances
provision, together with all interest thereon and all amounts that may be indirectly secured by the Cross-Collateralization provision
of this Agreement.


 


Lender. The word "Lender" means
COMMUNITY BANK, its successors and assigns.


 


Note. The word "Note"
means all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender, together
with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes
or credit agreements.


 


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.


 


Rents. The word "Rents"
means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property.


 


GRANTOR HAS READ AND UNDERSTOOD
ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS, THIS AGREEMENT IS DATED MAY 11, 2017.


 




     


     


    

 





COMMERCIAL SECURITY
AGREEMENT





	Loan No: 155354101	(Continued)	Page 8


 


 



	GRANTOR:
	 
	 
	BISCO INDUSTRIES, INC.
	 
	By:	  
	 	GLEN F. CEILEY, PRES/CEO/CFO/SEC of BISCO
	 	INDUSTRIES, INC.