Document:

ex10_2.htm

    DEMAND
SECURED PROMISSORY NOTE

    

    Tucker,
Georgia

    

    Date:  August
__,
2008                                                                                                                     

    

    $2,000.000.00

    

    FOR VALUE
RECEIVED, the undersigned (the “Borrower”) promises to pay on demand to the
order of Presidential Financial Corporation (the “Lender”) at the Lender's main
office in Tucker, Georgia, or at such other place as Lender may designate, the
principal amount of TWO MILLION
AND NO/100 DOLLARS ($2,000,000.00) or so much
thereof as may from time to time be unpaid and outstanding, together with
interest per annum thereon at the rate of one percent (1.00%) above “Wall Street
Journal Prime”, with Wall Street Journal Prime being the prime rate of interest
quoted in The Wall Street Journal from time to time (the “Interest
Rate”).  If Wall Street Journal Prime becomes unavailable during the
term of this Note, Lender may designate a substitute index.  The
initial interest rate hereunder shall be six percent
(6.00%).  The interest rate hereunder shall adjust on the
published effective date of any change in Wall Street Journal Prime (or any
substitute index).  All payments received will first be applied to
interest and other charges due and owing to the Lender, and any remaining amount
shall then be applied to principal.

    

    This
Demand Secured Promissory Note (this “Note”) is the  Demand Secured
Promissory Note referred to in, is secured by the collateral in which Borrower
granted a security interest under, and is entitled to the benefits of, the Loan
and Security Agreement executed by Borrower in favor of Lender contemporaneously
herewith (the “Loan Agreement”).  Lender, from time to time, shall
make advances and re-advances as may be requested by Borrower and accept
payments in accordance with and subject to the provisions of this Note and the
Loan Agreement.  The amount outstanding under this Note may vary from
time to time by increases of up to the maximum principal amount stated above
plus accrued interest, other charges and expenses, and decreases down to no
outstanding principal or accrued interest, other charges
and  expenses.

    

    The interest rate on the principal
indebtedness evidenced by this note is as stated above.  All other
fees and charges (including without limitation the “Service Charge” defined
below) paid in connection with this Note by Borrower to the Lender are payments
for the services of originating, booking, servicing and maintaining the loan and
other administrative services (including, but not limited to, periodic audits)
as set forth in O.C.G.A. Section 7-4-2(A)(1) and do not constitute fees for the
use of money.  Interest herein shall be computed and shall accrue on
the fifteenth (15th) and
last day of each month.

     

    
      
        
        

      

      
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    In addition to interest, Borrower will
pay Lender a monthly service charge (“Service Charge”), which shall be earned by
and due and payable to Lender as set forth on Schedule B of the Loan
Agreement.  Any Service Charge for which Borrower is obligated shall
be added to Borrower’s loan account immediately before any payment in full of
all of Borrower’s obligations under this Note.

    

    THE PARTIES AGREE THAT, AND BORROWER
INSTRUCTS LENDER THAT, IMMEDIATELY UPON ACCRUAL OF INTEREST AND OTHER CHARGES
PROVIDED FOR HEREIN AND IN THE LOAN AGREEMENT (INCLUDING, BUT NOT LIMITED TO,
THE SERVICE CHARGES), SUCH INTEREST AND OTHER CHARGES SHALL BE PAID BY ADVANCES
HEREUNDER AND CHARGED TO BORROWER’S LOAN ACCOUNT WITH LENDER.  SUCH
ADVANCES SHALL THEREAFTER BEAR INTEREST AND BE SUBJECT TO OTHER CHARGES UPON THE
SAME TERMS AS OTHER ADVANCES HEREUNDER, AND SUCH ADVANCES ARE AGREED BY THE
PARTIES TO BE PRINCIPAL PURSUANT TO O.C.G.A. SECTION
7-4-2(A)(3).  BORROWER SPECIFICALLY AGREES, BY EXECUTION OF THIS NOTE,
TO THIS TREATMENT OF ALL ACCRUED BUT UNPAID INTEREST AND OTHER CHARGES UNDER
THIS NOTE AND THE LOAN AGREEMENT.

    

               All
computations of interest shall be calculated on a daily basis upon the unpaid
balance with each day  representing  1/360th of a
year.  Each advance under this Note shall be added to the outstanding
balance under this Note and shall accrue interest commencing on the effective
date of the transfer of the advance proceeds originated by Lender or the date of
issue of the check or other payment instrument by Lender disbursing the advance
proceeds, regardless of the date Borrower actually obtains access to the
funds.  Upon and after Lender’s sending notice to Borrower that
Borrower is in default under this Note or the Loan Agreement, in lieu of the
above-described Interest Rate, the Borrower agrees to pay interest at a Default
Interest Rate per annum rate equal to the Interest Rate plus two percent
(2.00%), and interest under this Note shall thereafter be calculated using the
Default Interest Rate.

    

    It is the intention of Lender and
Borrower to conform strictly to any applicable laws.  Accordingly, if
the transactions contemplated hereby would violate applicable law governing the
Highest Lawful Rate (as defined below), then, in that event, notwithstanding
anything to the contrary in this Note, the Loan Agreement or any other agreement
entered into in connection with or as security for or guaranteeing this Note,
the following will apply: the aggregate of all payments which constitute
interest under applicable law that is contracted for, taken, reserved, charged,
or received by Lender under this Note or the Loan Agreement or under any other
agreement entered into in connection with or as security for or guaranteeing
this Note shall under no circumstances be in an amount or at a rate that would
otherwise cause a violation of law or exceed the Highest Lawful Rate (as defined
below), and any excess shall be canceled automatically and, if theretofore paid,
shall, at the option of Lender, be credited by Lender on the principal amount of
any indebtedness owed to Lender by Borrower or refunded by Lender to
Borrower.

    

    “Highest Lawful Rate” means the maximum
interest rate that at any time or from time to time may be lawfully contracted
for, taken, reserved, charged, or received on amounts due to Lender, under laws
applicable to Borrower or Lender with regard to this Note that are presently in
effect or, to the extent allowed by law, under such applicable laws that then
allow a higher maximum lawful rate than applicable laws now allow.

     

    
      
        
        

      

      
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    Any Event of Default by Borrower under
the Loan Agreement shall constitute a default under this Note; provided,
however, that neither this provision, any other provision of this Note, or any
provision of any other agreement between Lender and Borrower is intended to or
shall in any way limit, prejudice or otherwise affect the demand nature of this
Note.  Lender shall have the absolute and unconditional right to
demand payment of this Note in Lender’s discretion at any time, regardless of
the existence of any provision hereof or of any compliance or noncompliance by
Borrower with any such provision.  Time is of the essence of this
Note.

    

    Borrower hereby waives demand,
presentment, notice, protest and notice of dishonor and diligence in collection
or bringing suit and agrees that Lender may accept partial payment, or release
or exchange security or collateral, without discharging or releasing any
unreleased collateral or the obligations evidenced hereby.  Borrower
further waives any and all rights of exemption, both as to personal and real
property, under the constitution or laws of the United States, the State of
Georgia, or any other state or jurisdiction.  Lender shall not be
deemed to waive or have waived any of its rights hereunder unless such waiver be
in writing and signed by Lender, and no failure, delay or omission by Lender in
exercising any of its rights shall operate as a waiver of such
rights.  A waiver by Lender in writing on one occasion shall not be
construed as a consent to or a waiver of any right or remedy on any future
occasion.

    

    Borrower agrees to pay reasonable
attorneys’ fees and costs incurred by Lender in collecting or attempting to
collect this Note, whether by suit or otherwise.  Attorney’s fees
relating to collection for which Borrower shall be responsible to reimburse
Lender shall be equal to the lesser of: (a) actual fees and expenses or (b)
fifteen percent (15%) of the principal and interest owed hereunder at the time
of commencement of collection activities or the maximum amount permitted by law
then in effect.

    

    The word "Borrower" as used herein
shall include the plural, should more than one execute this Note; the masculine
and feminine gender, regardless of the sex of Borrower or any of them;
partnerships, corporations, and other legal entities, should such an entity
execute this Note; and the heirs, legal representatives, successors and assigns
of Borrower.  The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof shall apply to each of
them.  The word "Lender" as used herein shall when the circumstances
or context requires, include the plural and the successors and assigns of
Lender.

    

    The loan evidenced hereby has been made
and this Note has been made and delivered in the State of
Georgia.  THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL
LAWS OF THE STATE OF GEORGIA AS TO INTERPRETATION, ENFORCEMENT, VALIDITY,
CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT LIMITATION,
THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, and shall be binding upon
Borrower (and each one of them, if more than one) and Borrower’s heirs, legal
representatives, successors and assigns (and each one of them, if more than
one).  If this Note contains any blanks when executed by Borrower,
Lender is hereby authorized, without notice to Borrower, to complete any such
blanks according to the terms upon which the loan or loans were
granted.

    

    To induce Lender to make the loan
evidenced by this Note, the Borrower (i) irrevocably agrees that all actions by
Borrower arising directly or indirectly as a result or in consequence of this
Note or any 

     

    
      
        
        

      

      
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    other
agreement with Lender, or the Collateral, shall be instituted and litigated only
in courts having situs in the County of Fulton, state of Georgia; (ii) hereby
consents to the exclusive jurisdiction and venue of any state or federal court
located and having its situs in said county; and (iii) waives any objection
based upon forum non-conveniens.  Notwithstanding the foregoing,
nothing contained in this paragraph shall prevent Lender from bringing any
action or exercising any rights against Borrower, any guarantor, any security
for the Note, or any of Borrower’s or any guarantor’s properties in any other
county, state or jurisdiction.  Initiating such action or proceeding
or taking any such action in any other state or jurisdiction shall in no event
constitute a waiver by Lender of any of the foregoing.  IN ADDITION,
LENDER AND THE BORROWER (OR ANY ONE OF THEM, IF MORE THAN ONE) HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY
TO THIS NOTE, THE OBLIGATIONS, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY
THE BORROWER OR LENDER WHICH MAY IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISE OUT
OF OR RELATES TO THE RELATIONSHIP BETWEEN THE BORROWER AND LENDER.

    

    IN WITNESS WHEREOF, Borrower has caused
this Note to be duly executed and its seal to be affixed by its duly authorized
officers, or has signed and sealed this Note as the case may be, and has
delivered this Note to Lender, the day and year first above
written.

     

    
      	
               

              OE
      SOURCE, L.C.

            
	 
      	 
      
	
              By:

            	 
	
              Name:

            	
              Harry
      Christenson

            
	
              Title:

            	
              Chief
      Financial Officer

            

    

     

    
      	
              Attest:

            
	 
      
	
              By:

            
	
              Name:

            
	
              Title:ex10_3.htm

    

    CORPORATE
GUARANTY AGREEMENT

    

    State of
Georgia

    County
of  Dekalb

    

    In
consideration of the sum of One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the undersigned, and to induce Presidential Financial Corporation (hereinafter
referred to as “Lender" to extend credit to OE Source, L.C. (hereinafter
referred to as “Borrower”) and/or to renew or extend, in whole or in part, loans
or discounts already contracted for by Borrower, and/or from time to time to
make loans to Borrower and/or enter into with Borrower any agreement with regard
to the assignment and/or financing of accounts, which extensions, renewals, and
other financial accommodations to Borrower will be of direct financial benefit
to the undersigned, the undersigned, jointly and severally, do hereby
unconditionally guarantee to Lender and to its endorsers, transferees,
successors and assigns, of either this Guaranty or any of the Obligations (as
hereinafter defined) secured hereby, the due and punctual payment in full of all
principal of and interest and premium, if any, on, and all other amounts in
respect of all Obligations of Borrower to Lender of any and every kind or
character, according to their respective terms, and do agree that if such
Obligations, or any of them, are not timely performed or paid by Borrower, the
undersigned will immediately perform and/or pay such Obligations according to
respective terms

    

    The
“Obligations” covered by this Guaranty include all obligations of Borrower to
Lender now existing or hereafter coming into existence, including, but not
limited to, all obligations of Borrower to Lender arising under or pertaining
to: any agreement regarding accounts receivable; any security device; any
promissory note; any loan, advance, over-advance, and/or account; any and all
other indebtedness and obligations of Borrower to Lender however evidenced or
arising; and any renewals or extensions, in whole or in part, of any of the
obligations heretofore described, together with all damages, losses, costs,
interest, charges, expenses and liabilities of every kind, nature and
description suffered or incurred by Lender, arising in any manner out of or in a
way connected with, or growing out of said Obligations of Borrower to Lender.
This is a continuing guaranty
and shall remain in force until a written notice revoking it has been received
by Lender via USPS Certified Mail to the following address:  Caller
Service #105100, Tucker, GA 30085-5100, but such revocation shall not release
the undersigned from liability for any and all Obligations of the principal then
in existence, or from any renewals or extensions thereof, in whole or in part,
and whether such renewals are made before or after such
revocation.

    

    The
undersigned hereby consent and agree that Lender may at any time, either with or
without consideration, surrender any property or other security of any kind or
nature whatsoever held by it or by any person, firm or corporation on its behalf
or for its account securing any of the Obligations covered by this Guaranty, or
substitute any collateral so held by it for other collateral of like kind or of
any kind without notice to or further consent from the undersigned and such
surrender or substitution shall not in any way affect the liability of the
undersigned hereunder.  The undersigned shall not be discharged from
their obligations and undertakings hereunder in the event Lender releases or
agrees not to sue any person against whom the undersigned has, to the knowledge
of Lender, a right of recourse or in the event Lender agrees to suspend its
rights to enforce any promissory note(s) signed by Borrower, or any guaranty
given by any other person, or any of Lender's rights in the collateral given by
Borrower to secure the loans made by Lender.  Lender shall be under no
duty to exercise all or any rights and remedies given by any note or agreement
signed by Borrower, nor given by any other guaranty given to Lender to secure
Borrower's indebtedness to Lender, as a condition or requirement of enforcing
this Guaranty.

    

    The
undersigned hereby waive any right to direct apportionment of payments provided
for in O.C.G.A. Section 13-4-42.  The undersigned further consent and
agree that lender shall have the right to apportion said payments at its
election and in its sole discretion.  The undersigned waive any
further notice of election by Lender.

    

    
      
        
        

      

      
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    The
undersigned waive notice of: the creation of any of the Obligations, notice of
nonpayment or default by Borrower under any of the Obligations or under any
agreement now or hereafter existing between Borrower and Lender; notice of
presentment, demand, dishonor, or protest; notice of acceptance of this Guaranty
or of the creation or extension or renewal of any Obligations of Borrower to
which this Guaranty relates; and any other notices whatsoever; and agrees that
no modification of any of the Obligations, and that no waiver, extension,
renewal, indulgence, settlement, compromise or failure to exercise due diligence
in collection, for any period or periods whether or not longer than the original
period, nor any surrender, substitution or release of any other person directly
or indirectly liable for any of the Obligations, or of any collateral security
given by Borrower, shall release the undersigned from any of the indebtedness
then accrued or thereafter to accrue under this Guaranty or any part
thereof.  In the event any claim hereunder is collected by law or
through an attorney-at-law, the undersigned shall be liable to Lender for
attorneys' fees equal to lesser of: (a) actual fees and expenses or (b) the
greater of (i) fifteen percent (15%) of the Obligations or (ii) the maximum
amount permitted by law then in effect.

    

    The
undersigned hereby subordinates any right of contribution, reimbursement,
recourse, indemnity, subrogation and any other 'claim,' as that term is defined
in Title 11 of the United States Code (hereinafter referred to as the
'Bankruptcy Code'), which the undersigned might now have or hereafter acquire,
against Borrower or Borrower's estate, which arise from the existence or
performance of the Obligations of the undersigned under this
Guaranty.  In the event that the Borrower files a petition under the
Bankruptcy Code or is the subject of an involuntary petition filed under the
Bankruptcy Code, then the Obligations covered by this Guaranty shall include all
Obligations of the Debtor, Debtor-in-Possession, or a trustee in bankruptcy to
the Lender.  The Obligations of the undersigned shall not be
considered fully paid, performed, and discharged unless and until all payments
by Borrower to Lender are no longer subject to any right of any person
(including, without limitation, any Debtor, Debtor-in-Possession or any trustee
in bankruptcy) to set aside such payments, or to seek to recoup the amount of
such payments or any part thereof.  Without limiting the generality of
the foregoing, the above-referenced right shall include, but is not limited to,
any right to recover preferences avoidable under the Bankruptcy
Code.  If any such payments by the Borrower to the Lender are set
aside, in whole or in part, or are settled by Lender (the terms and conditions
of any such settlement to be determined in Lender's absolute discretion), then
to the extent of such settlement, the undersigned shall indemnify and be liable
for the full amount Lender so pays together with costs, interest, attorneys'
fees and any and all expenses which Lender pays or incurs in connection
therewith.

    

    The
undersigned agree that no act or omission on the part of Lender shall in any way
affect or impair this Guaranty.  The undersigned hereby waive the
right to require the holder of the Obligations guaranteed to take action against
the principal as provided for in O.C.G.A. Section 10-7-24.

    

    This
Guaranty is made subject to all terms, conditions, agreements, or stipulations
contained in the agreements, instruments and other documents evidencing the
Obligations hereby guaranteed, which are hereby expressly incorporated herein,
and the undersigned agrees that the terms, conditions and provisions of any
agreements, instruments or other documents which may be executed by Borrower to
evidence such Obligations in the future shall simultaneously with their
execution, become a part of this Guaranty.

    

    The
undersigned and each of them waive and renounce each for himself and family any
and all homestead or exemption rights either of them may have under or by virtue
of the constitution or laws of Georgia, any other state, or the United States,
against the liabilities and Obligations hereby created, and do hereby, jointly
and severally, transfer, convey and assign to Lender or holder hereof a
sufficient amount of any homestead or exemption that may be allowed to the
undersigned, or any of them, including such homestead or exemption as may be set
apart in bankruptcy to pay this obligation in full, with all costs of
collection; and each of the undersigned hereby directs the trustee in bankruptcy
having possession of such homestead or exemption to deliver to Lender a
sufficient amount of property or money so set apart as exempt to pay the
obligation hereby created.

    

    
      
        
        

      

      
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    Where the
Obligations of Borrower hereby guaranteed is an obligation of a corporation,
this Guaranty is to cover all Obligations to Lender purporting to be made in
behalf of Borrower by an officer or agent of Borrower without regard to the
actual authority of such officer or agent.  The term "corporation'or
Borrower shall include associations of all kinds and all purported corporations
whether correctly and legally natural persons.  This agreement binds
any natural person's heirs, administrators and executors, and where a
corporation, its successors and assigns.  Where signed by more than
one person, the singular term 'undersigned' shall include the plural, and their
obligation shall be joint and several.

    

    The
undersigned agree that this Guaranty shall be governed by and construed and
enforced according to the laws of the State of Georgia.  Wherever
possible each provision of the Guaranty shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under applicable law, such provision
shall be effective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of the
Guaranty.  The undersigned irrevocably consents that any legal action
or proceeding against it under, arising out of, or in any manner related to this
agreement may be brought in any court in Dekalb County, Georgia.  The
undersigned, by the execution and delivery of this agreement, expressly and
irrevocably assents to and submits to the personal jurisdiction of such court in
any such action or proceeding.  The undersigned hereby expressly and
irrevocably waives any claim or defense in any such action or proceeding based
on any alleged lack of jurisdiction and proper venue or forum non conveniens or
any similar defense.

    

    IN WITNESS WHEREOF, the
undersigned, intending to be jointly and severally bound hereby, as hereinabove
described, have caused this Guaranty to be signed by their duly authorized
officers, and their seals affixed this the twenty-sixth day of August, 2008 at
Tucker, Georgia.

     

    
      	
              ATTEST:

            	 
      	
              GENERAL
      AUTOMOTIVE COMPANY

            
	 
      	 
      
	 
      	 
      	 
      	
              By:

            	 
	
              SEAL

            	 
      	 
      	
              Name:

            	
              Harry
      Christenson

            
	 
      	 
      	 
      	
              Title:

            	
              Chief
      Financial Officer

            

    

    

    ACCEPTANCE

    

    The
foregoing guaranty is accepted in Atlanta, Georgia, this twenty-sixth day of
August, 2008.

    

    PRESIDENTIAL FINANCIAL
CORPORATION

    

    By:                                                                

                Senior
Vice President

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