Exhibit
10.2


 


	COMMUNITY BANK	 	 
	Partnership Banking°	 	 


 


COMMERCIAL
SECURITY AGREEMENT


 


	
        Principal

        $10,000,000.00
	
        Loan Date

        07-12-2018
	
        Maturity

        08-01-2020
	
        Loan No

        155354101
	Call / Coll	
        Account

        600714
	Officer	Initials
	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:	BISCO INDUSTRIES, INC.	Lender:	COMMUNITY BANK
	 	1500 N. LAKEVIEW AVENUE	 	ANAHEIM BRANCH
	 	ANAHEIM, CA 92807	 	2300 EAST KATELLA AVENUE, SUITE 125
	 	 	 	ANAHEIM, CA 92806
	 	 	 	(800) 788-9999
	Grantor:	EACO CORPORATION	 	 
	 	1500 N. LAKEVIEW AVENUE	 	 
	 	ANAHEIM, CA 92807	 	 


 


THIS COMMERCIAL SECURITY AGREEMENT dated
July 12, 2018, is made and executed among EACO CORPORATION ("Grantor"); BISCO INDUSTRIES, INC. ("Borrower");
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 either Grantor or Borrower
to Lender, or any one or more of them, as well as all claims by Lender against Borrower and 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
Borrower or 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 Borrower regardless of whether the advances are made a)
pursuant to a commitment or b) for the same purposes.


BORROWER'S WAIVERS AND RESPONSIBILITIES.
Except as otherwise required under this Agreement or by applicable law, (A) Borrower agrees that Lender need not tell Borrower
about any action or inaction Lender takes in connection with this Agreement; (B) Borrower assumes the responsibility for being
and keeping informed about the Collateral; and (C) Borrower waives any defenses that may arise because of any action or inaction
of Lender, including without limitation any failure of Lender to realize upon the Collateral or any delay by Lender in realizing
upon the Collateral; and Borrower agrees to remain liable under the Note no matter what action Lender takes or fails to take under
this Agreement.


 


GRANTOR'S REPRESENTATIONS AND WARRANTIES.
Grantor warrants that: (A) this Agreement is executed at Borrower's request and not at the request of Lender; (B) Grantor has
the full right, power and authority to enter into this Agreement and to pledge the Collateral to Lender; (C) Grantor has established
adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and (D) Lender
has made no representation to Grantor about Borrower or Borrower's creditworthiness.


 




    	 	 	 



     


    

 


	 	COMMERCIAL SECURITY AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 2


 


 



 


GRANTOR'S WAIVERS. Grantor waives all requirements of
presentment, protest, demand, and notice of dishonor or non-payment to Borrower or Grantor, or any other party to the Indebtedness
or the Collateral. Lender may do any of the following with respect to any obligation of any Borrower, without first obtaining the
consent of Grantor: (A) grant any extension of time for any payment, (B) grant any renewal, (C) permit any modification of payment
terms or other terms, or (D) exchange or release any Collateral or other security. No such act or failure to act shall affect Lender's
rights against Grantor or the Collateral.


 


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 Borrower 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. 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 Florida, 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.


 




    	 	 	 



     


    

 


	 	COMMERCIAL SECURITY AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 3


 


 



 


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, reasonable 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 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 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


 


GRANTORS 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.


 




    	 	 	 



     


    

 


	 	COMMERCIAL SECURITY AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 4


 


 



 


LENDERS 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. Borrower fails to make any payment when
due under the Indebtedness.


 


Other Defaults. Borrower or 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 Borrower or Grantor.


 


Default in Favor of Third Parties. Borrower,
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 Borrower's, 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 Borrower or Grantor or on Borrower's or 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 Borrower's or Grantor's existence as a going business, the insolvency of Borrower or Grantor, the appointment of a receiver
for any part of Borrower's or 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 Borrower or 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 Borrower or Grantor or by any governmental agency against any collateral securing the Indebtedness.
This includes a garnishment of any of Borrower's or Grantor's accounts, including deposit accounts, with Lender, However, this
Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of
the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or 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 Borrower's or 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 Borrower 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 Florida 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 Borrower would be required to pay, immediately due
and payable, without notice of any kind to Borrower or 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. In the event of
a suit being instituted to foreclose this Agreement, Lender shall be entitled to apply at any time pending such foreclosure suit
to the court having jurisdiction thereof for the appointment of a receiver of any or all of the Collateral, and of all rents, incomes,
profits, issues and revenues thereof, from whatsoever source. The parties agree that the court shall forthwith appoint such receiver
with the usual powers and duties of receivers in like cases. Such appointment shall be made by the court as a matter of strict
right to Lender and without notice to Grantor, and without reference to the adequacy or inadequacy of the value of the Collateral,
or to Grantor's solvency or any other party defendant to such suit. Grantor hereby specifically waives the right to object to the
appointment of a receiver and agrees that such appointment shall be made as an admitted equity and as a matter of absolute right
to Lender, and consents to the appointment of any officer or employee of Lender as 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.


 




    	 	 	 



     


    

 


	 	COMMERCIAL SECURITY AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 5


 


 



 


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 Borrower 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. Borrower 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.


 


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.


 


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.


 


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 reasonable 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 reasonable attorneys'
fees and legal expenses whether or not there is a lawsuit, including reasonable 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 Florida. 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.


 


Joint and Several Liability. All
obligations of Borrower and Grantor under this Agreement shall be joint and several, and all references to Grantor shall mean each
and every Grantor, and all references to Borrower shall mean each and every Borrower. This means that each Borrower and Grantor
signing below is responsible for all obligations in this Agreement. Where any one or more of the parties is a corporation, partnership,
limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers,
directors, partners, members, or other agents acting or purporting to act on the entity's behalf, and any obligations made or created
in reliance upon the professed exercise of such powers shall be guaranteed under this Agreement.


 




    	 	 	 



     


    

 


	 	COMMERCIAL SECURITY AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 6


 


 



 


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 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 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 Borrower'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., 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 EACO CORPORATION.


 


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 Borrower 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.


 




    	 	 	 



     


    

 


	 	COMMERCIAL SECURITY AGREEMENT	 
	Loan No: 155354101	(Continued)	Page 7


 


 



 


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.


 


BORROWER AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED JULY 12, 2018.


 


	GRANTOR:	 
	 	 
	EACO CORPORATION	 
	 	 	 
	By:	/S/ GLEN F. CEILEY	 
	 	GLEN F. CEILEY, CEO/CFO/Secretary of EACO CORPORATION	 
	 	 	 
	BORROWER:	 
	 	 
	BISCO INDUSTRIES, INC.	 
	 	 	 
	By:	/S/ GLEN F. CEILEY	 
	 	GLEN F. CEILEY, Pres/CEO/CFO/Sec of BISCO INDUSTRIES, INC.	 


 


 



 


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