1 EXHIBIT 10.42 SECURITY AGREEMENT (BANKERS HAZARD DETERMINATION SERVICES, INC.) THIS SECURITY AGREEMENT (the "Agreement") is executed this 30 day of December, 1996, by BANKERS HAZARD DETERMINATION SERVICES, INC., a Florida corporation (the "Borrower"), in favor of FIRST OF AMERICA BANK - FLORIDA, F.S.B., a federal savings bank (the "Lender"), and is made in reference to the following facts: (A) On or about the date hereof, the Lender has agreed to make a secured loan to the Borrower in the original principal amount of $245,000.00 (the "Loan"). The Borrower will be sometimes referred to below as the "Obligor". The Loan is evidenced by a note executed by the Borrower, which will be sometimes referred to below as the "Note", and is secured by numerous instruments of security, including without limitation, Guaranty Agreements, Loan Agreement, other Security Agreements, and UCC-1 Financing Statements, the terms and provisions of all of which are incorporated in and made a part hereof, all of which Note and instruments of security collectively comprise the "Loan Documents". (B) As a condition to making the Loan, Lender has required the Borrower to grant the Lender a perfected first security interest in and lien on all of the items described on Exhibit "A" attached hereto, together with all parts, accessions, replacements, and all proceeds thereof, including insurance proceeds (collectively the "Collateral"). NOW THEREFORE, for and in consideration of the premises and other good and valuable consideration, the Borrower does hereby covenant, agree, warrant and represent with and to the Lender as follows: 1. Recitals. The statements contained in the recitals of fact set forth above (the "Recitals") are true and correct and the Recitals by this reference are made a part of this Agreement. 2. Security Interest. Borrower does hereby grant to Lender a first security interest in and lien on the Collateral as additional security to secure the payment of principal, interest and other sums due or to become due under the Note and any and all extensions, modifications or renewals of the Note, and all present and future indebtedness, obligations, and liabilities contained in or referred to or which may hereafter arise in connection with or as contemplated by the instruments of security for the Note, and any and all modifications or extensions of the Note and the instruments of security therefor, and all obligations and liabilities of Borrower hereunder, all of which are hereinafter referred to as the "Obligations." 3. Location of Collateral. The Collateral will at all times be located solely within the State of Florida, and will not be removed from the State of Florida without the prior written consent of Lender. 2 4. Payment. The Obligor shall pay and perform, all and singular, the Obligations, including but not limited to the payment of sums of principal and interest and other sums payable by virtue of the Loan Documents promptly when due, and shall perform all of Obligor's agreements in the Loan Documents and herein and to pay all taxes and assessments levied or assessed against the Collateral, against this Agreement and against the Obligations secured hereby, whether such taxes and assessments be against the Collateral, the Obligations, the Obligor, the Lender, or another. All such taxes and assessments shall be paid by the Obligor before they become delinquent, and before the date they would have become delinquent or within ten (10) days after payment of same, whichever shall be sooner, obliger shall deliver to Lender official receipts, or copies thereof, showing payment. 5. Protection of Lender's Security. Borrower is and will be the owner of the Collateral free and clear from any lien, security interest or encumbrance, except for the lien and the obligations of this Agreement. No financing statement covering any of the Collateral is on file in any public office. Borrower will from time to time at the request of Lender execute one or more financing statements and such other documents (and pay the costs of filing or recording the same in all public offices deemed necessary or desirable by Lender) and do such other acts and things, all as Lender may request to establish and maintain a valid perfected security interest in the Collateral to secure the payment and performance of the Obligations. 6. Costs and Attorneys' Fees. Borrower shall pay, all and singular, the expenditures, costs, charges and expenses, including reasonable attorneys' fees and costs information requests, incurred or paid at any time by the Lender because of the failure on the part of the Obligor promptly and fully to perform and pay the Obligations, and all such costs, charges and expenses shall be immediately due and payable and shall bear interest at the highest legal rate permitted by law to be charged by Lender from time to time, from date of payment by Lender until repaid by Borrower and, together with such interest, shall be secured by the lien of this Agreement. 7. Default. Borrower shall be in default under this Agreement upon the happening of any of the following events or conditions: (a) failure or omission to perform or pay when due any of the Obligations (including any installment thereof or interest thereon); (b) any warranty, representation or statement made or furnished to Lender by or on behalf of Borrower prove to have been false in any material respect when made or furnished; (c) Borrower makes an assignment for the benefit of creditors; (d) a Receiver is appointed for Borrower or any part of the Collateral; (e) Borrower files a Petition in Bankruptcy, is adjudicated a bankrupt, or files any petition or institutes any proceedings under the Bankruptcy Code with respect to Borrower's assets and liabilities; or (f) Borrower defaults in, breaches or fails to perform any one or more of the covenants and agreements contained in the Obligations, including without limitation, this Agreement, the Note, or any other instrument executed by Borrower in connection with the Loan secured hereby on even date herewith or hereafter. 2 3 8. Acceleration. Upon the occurrence of any default which remains uncured for ten (10) days or more, Lender may, at its option, declare all Obligations, or any of them (notwithstanding any provision thereof), immediately due and payable without demand or notice of any kind and the same thereupon shall immediately become and be due and payable without demand or notice, and Lender shall have and may exercise from time to time any and all rights and remedies of a Lender under the Uniform Commercial Code of the State of Florida and any and all other rights and remedies available to it under any other applicable law, including the right to foreclose this Agreement and the other instruments of security in the same proceedings. A monetary default shall be deemed to include failure to make payments of principal, interest and late charges under the Note as well as payments of taxes and governmental assessments and premiums for insurance under this Agreement and the other instruments of security for the Loan. Notwithstanding anything contained in the preceding sentences of this paragraph 8 to the contrary, there shall be no requirement of a curative period as set forth above in the event of a default described in subparagraphs (c), (d) or (e) of paragraph 7 hereof. Upon request or demand of Lender, Borrower shall, at Borrower's expense, assemble the Collateral and make it available to the Lender and Borrower shall promptly pay all costs of Lender of collection of any and all of the Obligations and enforcements of rights hereunder, including reasonable attorneys' fees and legal expenses. Expenses of retaking, holding, preparing for sale, selling or the like, shall include those incurred on appeal, if any. 9. Waiver. No waiver by Lender of any default shall operate as a waiver of any other default or of the same default on a future occasion. No delay or omission on the part of Lender in exercising any right or remedy shall operate as a waiver thereof or the exercise of any other right or remedy. 10. Provisions Cumulative. The provisions of this Agreement are cumulative and in addition to the provisions of the Note secured by this Agreement and the provisions of the instruments securing the Note and Lender shall have all the benefits, rights and remedies of and under the Note and any other instrument securing same. All rights of Lender hereunder shall inure to the benefit of its successors and assigns and all obligations of Borrower hereunder shall bind the successors and assigns of Borrower. 11. Florida Contract. This Agreement has been delivered in the State of Florida and shall be construed in accordance with the laws of Florida. 12. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity only, without invalidating the remainder of such provision or of the remaining provisions of this agreement. 13. Assignment by Lender. In the event of any assignment hereof by Lender, Borrower, jointly and severally, covenant and agree that Borrower will not assert against any assignee hereof any claim or defense which Borrower may have against Lender, except Borrower 3 4 may assert against any such assignee any defense of a type which may be asserted against a holder in due course of a negotiable instrument under the Uniform Commercial Code of the State of Florida. 14. Headings. The headings of the paragraphs contained in this Agreement are for convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meaning of the parties hereto. IN WITNESS WHEREOF, Borrower has executed this instrument under seal the day and year first above written. Signed, sealed and delivered BANKERS HAZARD DETERMINATION in the presence of: SERVICES, INC., a Florida corporation /s/ Harold David Holland By: /s/ G. Kristin Delano - --------------------------- --------------------------- Its Secretary (CORPORATE SEAL) - --------------------------- As to Borrower STATE OF GEORGIA ) COUNTY OF LOWNDES ) The foregoing instrument was acknowledged before me this 30 day of December, 1996, by G. KRISTIN DELANO, the Secretary of BANKERS HAZARD DETERMINATION SERVICES, INC., a Florida corporation, on behalf of the corporation. Personally Known OR Produced Identification -------- Type of Identification Provided Drivers License ---------------------- /s/ Tina S. Wyers ------------------------- SIGNATURE TINA S. WYERS ------------------------- NAME LEGIBLY PRINTED, TYPEWRITTEN OR STAMPED (SEAL) NOTARY PUBLIC My Commission Expires: 08/02/00 4 5 1995 & 1996 NET BOOK VALUE REPORT Placed in Acquisition Accumulated Net Book Company Sys # Description Service Value Depreciation Value - ---------------------------------------------------------------------------------------------------------------------- BHDS 208 INTEL STORAGE EXPRESS W/2ND DRIVE 01/01/95 10,394.00 4,547.37 5,846.6? BHDS 209 TOKEN RING OPTION 01/01/95 657.00 287.42 369.5? BHDS 210 ATLAS PROGRAM CENSUS CODE 01/01/95 800.00 350.00 450.0? BHDS 211 NOTEBOOK PC DELL 75 MHZ W/CARRYING CASE 01/01/95 3,667.45 1,604.50 2,062.9? BHDS 212 COMPAQ PROLINEA PC 02/01/95 1,836.07 765.03 1,071.0? BHDS 214 COMPAQ PROLINEA PC 03/01/95 2,281.24 902.99 1,378.25 BHDS 216 LASERJET 4 PLUS PRINTER 03/01/95 1,549.33 613.29 936.06 BHDS 217 COMPAQ PROLIANT S-1007 (SEE NOTES) 04/01/95 27,536.90 10,326.34 17,210.56 BHDS 218 COMPAQ PROLINEA PC 04/01/95 2,503.14 938.68 1,564.46 BHDS 219 COMPAQ PROLINEA PC 04/01/95 2,503.14 938.68 1,564.46 BHDS 220 COMPAQ PROLINEA PC 04/01/95 2,503.13 938.67 1,564.46 BHDS 224 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 225 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 226 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 227 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 228 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 229 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 230 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 231 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 232 S/C CHAIR 05/01/95 228.40 64.71 163.69 BHDS 233 S/C CHAIR 05/01/95 228.42 64.73 163.69 BHDS 234 GRAPHIC INFORMATION SYSTEMS FOR WINDOWS 06/01/95 544.70 181.57 363.13 BHDS 235 SEGATE 1 GIG DRIVE 06/01/95 1,583.70 527.90 1,055.80 BHDS 236 COMPAQ PROLINEA PC 06/01/95 1,954.28 651.42 1,302.86 BHDS 238 MADGE EISA TOKEN RING 06/01/95 724.20 241.39 482.81 BHDS 239 MADGE EISA TOKEN RING 06/01/95 724.20 241.39 482.81 BHDS 240 COMPAQ NETFLEX TOKEN RING CARD 06/01/95 521.85 173.94 347.91 BHDS 241 COMPAQ NETFLEX TOKEN RING CARD 06/01/95 521.85 173.94 347.91 BHDS 245 TOPOGRAPHICAL RATE MAPS (SEE NOTES) 06/01/95 14,892.04 3,971.21 10,920.83 BHDS 242 COMPAQ 4 ?GB HARD DRIVE 07/01/95 2,921.68 913.02 2,008.66 BHDS 243 UNIVERSAL WAN 50MM (SEE NOTES) 07/01/95 327.54 102.35 225.19 BHDS 244 PERLE 494E-56 CONTROLLER (SEE NOTES) 07/01/95 3,525.80 1,104.94 2,430.86 BHDS 246 TRADE SHOW DISPLAY/BOOTH (SEE NOTES) 07/01/95 6,783.49 1,695.87 5,087.62 BHDS 247 PROLINEA P/75 PC (SEE NOTES) 08/01/95 2,803.09 817.56 1,985.53 BHDS 248 PROLINEA P/75 PC (SEE NOTES) 08/01/95 2,803.09 817.56 1,985.53 BHDS 249 PROLINEA P/75 PC (SEE NOTES) 08/01/95 2,803.09 817.56 1,985.53 BHDS 253 COMPAQ PROLINEA 456DX4 PC (SEE NOTES) 08/01/95 2,508.84 731.74 1,777.10 BHDS 255 SUMMAGRAPHICS 36 X 48 DIGITIZER 08/01/95 1,578.25 368.25 1,210.00 BHDS 260 MITA 4086 COPIER 08/01/95 8,239.87 1,922.63 6,317.24 BHDS 256 HP JETDIRECT EXT PRINT SERVER 09/01/95 619.20 167.70 451.50 BHDS 257 IBM P/75 LAPTOP W/LCD & MISC. SOFTWARE 10/01/95 6,152.19 1,538.04 4,614.15 BHDS 258 SUMMAGRAPHICS DIGITIZER 11/01/95 1,567.55 399.23 1,208.32 BHDS 259 AGISW LAN PAX V3.01 10-USERS 11/01/95 4,041.64 926.20 3,115.44 BHDS 261 DELL DIMENSION S100T PC (SEE NOTES) 12/01/95 2,528.41 526.75 2,001.66 BHDS 262 DELL DIMENSION S100T PC (SEE NOTES) 12/01/95 2,528.41 526.75 2,001.66 BHDS 263 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 264 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 265 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 266 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 267 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 268 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 269 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 270 COMPAQ PROLINEA E5100 2/630 (SEE NOTES) 01/01/96 2,871.20 538.35 2,332.85 BHDS 271 DELL DIMENSION 590T PC (SEE NOTES) 01/01/96 2,734.07 512.64 2,221.43 BHDS 272 DELL DIMENSION 590T PC (SEE NOTES) 01/01/96 2,734.07 512.64 2,221.43 BHDS 273 MADGE CARDS FOR ASSET PS261 & 262 01/01/96 597.51 112.03 485.48 EXHIBIT "A" Page 1 of 2 6 1995 & 1996 NET BOOK VALUE REPORT Placed In Acquisition Accumulated Net Book Company Sys # Description Service Value Depreciation Value - ---------------------------------------------------------------------------------------------------------------------- BHDS 274 COMPAQ PROLINEA 575E PC (SEE NOTES) 01/01/96 2,451.89 459.72 1,992.17 BHDS 276 ATLAS SELECT 95/00 SUMMER 95 V3.02 SOFTWARE 01/01/96 872.70 163.63 709.07 BHDS 275 COMPAQ 4.3GB HOT PLUGGABLE DRIVE 02/01/96 1,870.75 311.78 1,558.97 BHDS 277 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 032/01/96 3,498.07 510.13 2,987.94 BHDS 278 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 03/01/96 3,498.07 510.13 2,987.94 BHDS 279 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 03/01/96 3,498.07 510.13 2,987.94 BHDS 280 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 03/01/96 3,498.07 510.13 2,987.94 BHDS 281 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 03/01/96 3,498.07 510.13 2,987.94 BHDS 282 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 03/01/96 3,498.07 510.13 2,987.94 BHDS 283 COMPAQ PROLINEA E 5/100 8/1060 (SEE NOTES) 03/01/96 3,498.01 510.12 2,987.89 BHDS 284 GEO CODER STAR DATA GDT DATABASE NATIONAL 04/01/96 17,134.65 2,141.83 14,992.82 BHDS 285 SUMMA GRAPHIC DIGITIZING TABLE 04/01/96 1,720.25 172.02 1,548.23 BHDS 286 INTERNAL HP JET DIRECT PRINT SERVER 04/01/96 567.80 70.97 496.83 BHDS 287 EXTERNAL HP JET DIRECT PRINT SERVER 04/01/96 607.80 75.97 531.83 BHDS 288 COMPAQ PROLINEA E 5100 E/630 04/01/96 3,003.31 375.41 2,627.90 BHDS 289 DELORME MAPPING SOFTWARE 05/01/96 1,179.00 122.81 1,056.19 BHDS 297 COMPAQ PROLINEA 5133 16/2 GB MINITOWER 05/01/96 4,015.56 418.28 3,597.28 BHDS 291 COMPAQ PROLINEA E 5100 8/630 (SEE NOTES) 05/01/96 2,939.14 306.16 2,632.98 BHDS 292 COMPAQ PROLINEA E 5100 8/630 (SEE NOTES) 05/01/96 2,939.14 306.16 2,632.98 BHDS 293 COMPAQ PROLINEA E 5100 8/630 (SEE NOTES) 05/01/96 2,939.14 306.16 2,632.98 BHDS 294 QUASAR 27" TV/VCR 05/01/96 629.15 65.58 563.62 BHDS 295 ACD MANAGER VERSION 2.0 SOFTWARE 07/01/96 4,260.00 266.25 3,993.75 BHDS 297 GEO LOCATOR SOFTWARE 07/01/96 10,000.00 625.00 9,375.00 BHDS 295 COMPAQ SMEM 64MB EXPANSION KIT 07/01/96 2,350.14 146.88 2,203.26 E 299 GEOSTAN DLL UPGRADE 08/01/96 2,180.00 90.83 2,089.17 BHDS 300 HOST FAX SERVER SOFTWARE & EQUIPMENT 08/01/96 33,090.00 0.00 33,090.00 BHDS 301 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 2,261.63 94.23 2,167.40 BHDS 302 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 2,261.63 94.23 2,167.40 BHDS 303 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 2,261.63 94.23 2,167.40 BHDS 304 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 2,261.63 94.23 2,167.40 BHDS 305 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 2,689.64 112.06 2,577.58 BHDS 306 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 2,689.64 112.06 2,577.58 BHDS 307 CTX 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 308 CTX 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 309 CTX 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 310 CTX 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 311 CTX 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 312 CTX 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 313 COMPAQ PROLINEA E 5100 (SEE NOTES) 08/01/96 3,240.36 135.01 3,105.35 BHDS 314 ARTMEDIA 17" MONITOR 08/01/96 798.00 33.25 764.75 BHDS 316 COVERMATE 600 BINDING SYSTEM 10/01/96 854.93 0.00 854.93 ---------- --------- ---------- TOTAL BHDS 304,103.57 58,768.19 245,335.38 EXHIBIT "A" Page 2 of 2