SECURITY AGREEMENT AND ASSIGNMENT
THIS SECURITY AGREEMENT AND ASSIGNMENT is entered into as of June 3,
1998 by and between ASI LANDMARK, INC., a Colorado corporation (the "Debtor")
and BANK ONE, COLORADO, N.A., a national banking association (the "Agent"),
for the ratable benefit of the Banks under that certain Credit Agreement
dated as of June 3, 1998, by and among the Analytical Surveys, Inc. (as
Borrower thereunder), Agent and the Banks, with such Credit Agreement, as
hereafter amended, modified or extended by the parties thereto referred to as
the "Credit Agreement."
Section 1
DEFINITIONS
SECTION 1.1 Specific Definitions. The following definitions shall
apply:
(a) "Account Debtors" means Debtor's customers and all other persons
who are obligated or indebted to Debtor in any manner, whether directly or
indirectly, primarily or secondarily, contingently or otherwise, with respect
to Accounts or General Intangibles.
(b) "Accounts" shall have the meaning set forth at SECTION 2.1(a).
(c) "Agent" shall have the meaning assigned to it in the Recitals hereto.
(d) "Banks" shall have the meaning assigned to it in the Recitals hereto.
(e) "Code" shall mean the Uniform Commercial Code of the State of
Colorado.
(f) "Credit Agreement" shall have the meaning assigned to it in the
Recitals hereto, and pursuant to which this Security Agreement and Assignment
is given.
(g) "Debtor" shall have the meaning assigned to it in the Recitals hereto.
(h) "Debtor's Obligations" shall mean the full and prompt payment and
performance of all of the indebtedness, obligations, convents, agreements and
liabilities of Debtor to Agent together with all interest and other charges
thereon, whether direct or indirect, existing, future, contingent or
otherwise, due or to become due, under or arising out of or in connection
with (i) Debtor's guaranty; (ii) any pledge or guaranty; (iii) any overdraft;
(iv) any Loan Document and (v) any and all modifications, extensions and
renewals of any of the foregoing.
(i) "Debtor's Books" means all of Debtor's books and records including,
but not limited to: minute books; ledgers; records indicating, summarizing,
or evidencing Debtor's assets, liabilities, and the Accounts; all information
relating to Debtor's business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, and other
computer-prepared information.
(j) "Debtor's Guaranty" shall mean the unlimited guaranty of prompt
payment dated June 3, 1998 given by Debtor to Agent as the same may be
supplemented, modified, amended or restated from time to time.
(k) "Equipment" shall have the meaning set forth at SECTION 2.1(c).
(l) "Event of Default" shall have the meaning set forth in SECTION 9.
(m) "General Intangibles" shall have the meaning set forth at
SECTION 2.1(d).
(n) "Guarantor" and "Guarantors" shall mean, respectively, any one or
more of Debtor and ASI Landmark, Inc., a Colorado corporation.
(o) "Inventory" shall have the meaning set forth at SECTION 2.1(b).
(p) "Lien" means any security interest, mortgage, pledge, assignment,
lien, or other encumbrance of any kind, including any interest of a vendor
under a conditional sale contract or consignment and any interest of a lessor
under a capital lease.
(q) "Loan Documents" shall mean the Credit Agreement, the Notes, this
Security Agreement and Assignment, and any other instrument now or hereafter
given to evidence, secure or guaranty Debtor's Obligations.
(r) "Permitted Liens" means:
a. Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or which are being
contested in good faith and with due diligence and with
respect to which adequate reserves have been established;
b. carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like Liens arising in the ordinary
course of business not yet delinquent or which are being
contested in good faith and with due diligence and with
respect to which adequate reserves have been established;
-2-
c. Liens (other than Liens imposed by ERISA) consisting of
pledges or deposits under workers' compensation, unemployment
insurance and other social security legislation;
d. easements, rights-of-way, zoning restrictions and other
similar encumbrances of record on real property incurred in
the ordinary course of business which, in the aggregate, are
not material in dollar amount, and which do not in any case
interfere with the ordinary conduct of the business of the
Borrower or any Guarantor;
e. Liens existing on the date hereof and disclosed in SCHEDULE
4.1(o) to the Credit Agreement;
f. purchase money security interests securing payment by the
Borrower or any Guarantor of a portion of the purchase price
of any asset, PROVIDED THAT (i) any such Lien attaches to such
property concurrently with or within 20 days after the
acquisition thereof, (ii) such Lien attaches solely to the
property so acquired in such transaction, (iii) the principal
amount of the debt secured thereby does not exceed 100% of the
cost of such property, and (iv) the aggregate outstanding
principal of such purchase money security interest Liens shall
not at any one time exceed $4,000,000;
g. Liens, deposits or pledges to secure the non-delinquent
performance of bids, tenders, contracts (other than contracts
for the payment of money), leases (permitted under this
Agreement), public or statutory obligations, surety, stay,
appeal, indemnity, performance or other similar bonds, or
other similar obligations arising in the ordinary course of
business; or
h. Liens arising out of the lease of capital equipment in the
aggregate amount at any one time not exceed $4,000,000; or
i. any attachment or judgment Lien either in existence less than
30 calendar days after the entry thereof, or with respect to
which execution has been stayed, or with respect to which
payment in full above any deductible is covered by insurance.
(s) "Proceeds" shall have the meaning set forth in SECTION 2.1(g).
(t) "Secured Obligations" shall mean Debtor's Notes, Debtor's
Obligations and "Secured Party Expenses."
-3-
(u) "Secured Party Expenses" means: (i) all costs and expenses
(including, without limitation, taxes and insurance premiums) required to be
paid by Debtor under this Security Agreement and Assignment or under any of
the other Loan Documents that are paid or advanced by Agent; (ii) filing,
recording, publication, and search fees paid or incurred by Agent in
connection with Agent's transactions with Debtor, (iii) costs and expenses
incurred by Agent to correct any default or enforce any provision of the Loan
Documents or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, and preparing for sale and/or advertising to sell
the Collateral, whether or not a sale is consummated (including reasonable
counsel, consultant and appraiser fees and expenses); (iv) costs and expenses
of suit incurred by Agent as Agent in enforcing or defending the Loan
Documents or any portion thereof, and (v) Agent's reasonable attorney fees
and expenses incurred (before or after execution of this Security Agreement
and Assignment) in advising Agent with respect to, or in structuring,
drafting, reviewing, negotiating, amending, terminating, enforcing,
defending, or otherwise concerning, the Loan Documents or any portion
thereof, irrespective of whether suit is brought.
SECTION 1.2 Uniform Commercial Code Terms.
Terms used in this Security Agreement and Assignment, other than those
defined in this SECTION 1.1, have the meanings accorded to them in the
Uniform Commercial Code of the State of Colorado.
SECTION 1.3 Construction.
(a) Unless the context of this Security Agreement and Assignment
clearly requires otherwise, the plural includes the singular, the singular
includes the plural, the part includes the whole, "including" is not limited,
and "or" has the inclusive meaning of the phrase "and/or." The words
"hereof," "herein," "hereunder," and other similar terms in this Security
Agreement and Assignment refer to this Security Agreement and Assignment as a
whole and not exclusively to any particular provision of this Security
Agreement and Assignment.
(b) It is intended that the Credit Agreement expresses the primary
understandings and agreements of the parties. In the event of any
inconsistency or conflict between the terms of this document and the terms of
the Credit Agreement, the provisions of the Credit Agreement shall control.
Any schedule required by this document which duplicates the requirement of a
schedule attached to the Credit Agreement shall be deemed to be fulfilled by
the schedule to the Credit Agreement. Capitalized terms used but not defined
herein, and defined in the Credit Agreement, shall have the meaning given
thereto in the Credit Agreement.
-4-
Section 2
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest. In order to secure prompt
payment and performance of Debtor's Guaranty and Debtor's Obligations, Debtor
hereby grants to Agent a continuing first-priority pledge and security
interest in the following property of Debtor (the "Collateral"), whether now
owned or existing or hereafter acquired or arising and regardless of where
located:
(a) All Accounts, which shall mean all accounts, contract rights,
notes, drafts, instruments, documents, chattel paper, and obligations in any
form owing to Debtor arising out of the sale or lease of goods or the
rendition of services by Debtor whether or not earned by performance; all
credit insurance, guaranties, letters of credit, advices of credit, and other
security for any of the above; all merchandise returned to or reclaimed by
Debtor; and Debtor's Books relating to any of the foregoing.
(b) All Inventory, which shall mean any and all goods, supplies, wares,
merchandise, and other tangible personal property, including raw materials,
work in process, supplies and components, and finished goods, whether held
for sale or lease or to be furnished under any contract for service or so
leased or furnished, or used or consumed in Debtor's business, and also
including products of and accessions to inventory, packing and shipping
materials, and all documents of title, whether negotiable or nonnegotiable,
representing any of the foregoing.
(c) All Equipment, which shall mean all equipment, fixtures, machinery,
machine tools, office equipment, furniture, furnishings, motors, motor
vehicles, tractors, trailers, non-titled vehicles, tools, dies, parts, jigs,
goods, all attachments, accessories, accessions, parts, replacements,
substitutions, additions, and improvements thereto, and all supplies used or
to be used in connection therewith, including without limitation those items
of Equipment set forth on SCHEDULE 2.1(c) attached.
(d) All General Intangibles, which shall mean all general intangibles,
choses in action, causes of action, and all other personal property of every
kind and nature (other than goods and Accounts), including, without
limitation: (i) all tax refunds, (ii) all inventions, processes, production
methods, proprietary information, know-how and trade secrets used or useful
in the business of Debtor, (iii) all trade names, trademarks, and service
marks; all trademark and service mark registrations (other than intent to use
applications for trademarks and service marks, if any) and applications for
trademark and service mark registrations and all renewals of trademark and
service mark registrations, all rights relating thereto, including without
limitation, the right to recover for all past, present and future
infringements thereof, and all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together with the goodwill of the business
connected with
-5-
the use of, and symbolized by, each such trade name, trademark, and service
mark, (iv) all logos, copyrights, patents and applications for patents, (v)
all licenses or other agreements relating to any of the foregoing, (vi) all
information, customer lists, identifications of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic machinery
software and programs, and the like pertaining to any present or future
operations by Debtor, (vii) all field repair data, sales data and other
information relating to sales or service of all present or future products,
(viii) all accounting information and all media in which or on which any of
the information or knowledge or data or records which pertain to any present
or future operations of Debtor may be recorded or stored and all computer
programs used for the compilation or printout of such information, knowledge,
records or data, (ix) all licenses, consents, permits, variances,
certifications and approvals of any governmental authority or any other
person pertaining to any operations now or hereafter conducted by Debtor
(including, without limitation, all franchises, licenses, consents, permits,
variances, certifications and approvals specifically described on
SCHEDULE 2.1(d)(ix) attached), (x) all licenses, franchises, permits or other
rights to use any processes, production methods, proprietary information,
know-how, trade secrets and software in connection with Debtor's business
(including, without limitation, any of the foregoing described on
SCHEDULE 2.1(d)(x), attached), (xi) all causes of action, claims and
warranties relating to any of the foregoing, (xii) all certificates of
deposits evidencing a deposit by Debtor with Agent or any other financial
institution, (xiii) all promissory notes payable to Debtor which are
determined not to be instruments, (xiv) all Debtor's interest as lessee under
all leases of real and personal property (including, without limitation, the
leases set forth on SCHEDULE 4.1(o) to the Credit Agreement or any other
schedule that is either now or hereafter delivered by Debtor to Agent and
incorporated herein by reference) and (xv) all Debtor's interest in contracts
and agreements (including, without limitation, the contracts set forth on
SCHEDULE 4.1(n) of the Credit Agreement or any other schedule that is either
now or hereafter delivered by Debtor to Agent and incorporated herein by
reference).
(e) Investment Property, which shall mean all certificated or
uncertificated securities, security entitlements, security accounts,
commodity contracts or commodity accounts.
(f) Possessory Collateral, which shall mean notes, drafts, instruments,
documents, securities, money, letters of credit, advices of credit, or other
assets, properties or indebtedness owned by Debtor or in which Debtor has an
interest that now or thereafter are at any time in the possession or control
of Agent, Agent's affiliates, custodians, participants and designees or in
transit by mail or carrier to Agent, Agent's affiliates, custodians,
participants and designees or in the possession of any other third party
acting on behalf of Agent, without regard to whether Agent received the same
in pledge, for safekeeping, as agent for collection or transmission or
otherwise, or whether Agent had conditionally released the same, and all
deposit accounts of Debtor with Agent, Agent's affiliates, custodians,
participants and designees, including all demand, time, savings, passbook, or
other accounts.
-6-
(g) Proceeds, which shall mean all proceeds and products of Collateral
and all additions and accessions to, replacements of, insurance or
condemnation proceeds of, and documents covering Collateral; all property
received wholly or partly in trade or exchange for Collateral; all claims
against third parties arising out of damage, destruction, or decrease in
value of the Collateral; all leases of Collateral; and all rents, revenues,
issues, profits, and proceeds, arising from the sale, lease, license,
encumbrance, collection, or any other temporary or permanent disposition of
the Collateral or any interest therein.
Section 3
PROVISIONS CONCERNING ACCOUNTS
SECTION 3.1 Office and Records of Debtor. Debtor's chief executive
office is located at: 1903 North Harrison Avenue, Cary, North Carolina
27513. Debtor maintains all of its records with respect to its Accounts in
Indiana. Debtor shall not maintain its chief executive office or its records
with respect to its Accounts at any other location except after thirty (30)
days prior written notice to the Agent.
SECTION 3.2 Representations. Debtor represents and warrants that
each Account of the Debtor at the time of its assignment to Agent (a) will be
owned solely by Debtor; (b) will be for a liquidated amount maturing as
stated in Debtor's Books; (c) will be a bona fide existing obligation created
by the final sale and delivery of goods or the rendition of services to
Account Debtors by Debtor in the ordinary course of its business; and (d)
will not be subject to any known deduction, offset, counterclaim, return
privilege, or other condition, except as reflected on Debtor's Books.
SECTION 3.3 Shipment Arrangements. After two (2) weeks notice,
unless an Event of Default has occurred then promptly upon the request of the
Agent, Debtor shall deliver to Agent, as Agent may request no more often than
annually, so long as an Event of Default has not occurred, copies of delivery
receipts, customer purchase orders, shipping instructions, bills of lading,
and other documentation respecting shipment arrangements. Absent such a
request by Agent, copies of all such documentation shall be held by Debtor as
custodian for Agent.
SECTION 3.4 Agent's Rights. Upon and after the occurrence of an
Event of Default and at any time Agent reasonably believes an Event of
Default has occurred or is likely to occur with the passage of time, any
officer, employee, or agent of Agent shall have the right, at any time or
times hereafter, in the name of Agent or its nominee (including Debtor), to
verify the validity, amount, or any other matter relating to any Accounts by
mail, telephone, or otherwise; and all reasonable costs thereof shall be
payable by Debtor to Agent. At such time, Agent or its designee may at any
time notify customers or Account Debtors that Accounts have been assigned to
Agent or of Agent's security interest therein and collect the same directly
and charge all collection costs and expenses to Debtor's account.
-7-
SECTION 3.5 Post Default Rights. After a declared Event of Default
hereunder, no discount, credit, or allowance shall be granted by Debtor to any
Account Debtor and no return of merchandise shall be accepted by Debtor without
Agent's consent. Agent may thereafter settle or adjust disputes and claims
directly with Account Debtors for amounts and upon terms that Agent considers
advisable, and in such cases, Agent will credit Debtor's account with only the
net amounts received by Agent in payment of such disputed Accounts, after
deducting all Agent Expenses incurred in connection therewith.
Section 4
PROVISIONS CONCERNING INVENTORY
SECTION 4.1 Locations. SCHEDULE 4.1(o) of the Credit Agreement is a
true and correct list showing all states where inventory is located (except for
Inventory in transit), including, without limitation, facilities leased and
operated by Debtor and locations neither owned nor leased by Debtor, and showing
all such places where Inventory of Debtor has been located in the past four
months. Such list indicates whether the premises are those of a warehouseman or
other party. No Inventory will be removed from states set forth in such
Schedule except for the purpose of sale in the ordinary course of Debtor's
business provided that Inventory may be moved from one location set forth in
such Schedule to another in the ordinary course of Debtor's business. Debtor
will promptly notify Agent of any new Inventory location.
SECTION 4.2 Inventory, Books and Records. Debtor shall keep all
Inventory in good order and condition and shall maintain full, accurate, and
complete books and records with respect to Inventory at all times.
SECTION 4.3 Inspection of Collateral. Agent may, during Debtor's usual
business hours and consistent with SECTION 5.1(m) of the Credit Agreement,
inspect and examine the Inventory and check and test the same as to quality,
quantity, value, and condition.
SECTION 4.4 Sales of Inventory. Subject to the rights of Agent upon the
occurrence of an Event of Default, Debtor may sell Inventory in the ordinary
course of its business (which does not include a transfer in full or partial
satisfaction of indebtedness or a transfer for less than fair equivalent value).
SECTION 4.5 Warehouses and Landlords. Except as set forth on
SCHEDULE 4.1(o) of the Credit Agreement, Inventory is not now and shall not at
any time hereafter be stored with a bailee, warehouse, or similar party without
Agent's prior written consent.
Section 5
-8-
PROVISIONS CONCERNING EQUIPMENT
SECTION 5.1 Maintenance and Repair. Debtor shall keep and maintain
Equipment material to its business in good operating condition and repair and
make all necessary repairs thereto so that the value and operating efficiency
thereof shall at all times be maintained and preserved. Debtor shall
immediately notify Agent of any material loss or damage to the Equipment.
SECTION 5.2 Fixtures. Debtor shall not permit any item of Equipment
that is not a fixture to become a fixture to real estate or an accession to
other property without the prior written consent of Agent, and the Equipment is
now and shall at all times remain personal property except with Agent's prior
written consent. If any of the Collateral is or will be attached to real estate
in such a manner as to become a fixture under applicable state law and if such
real estate is encumbered and such encumbrance attaches to such Collateral,
Debtor will obtain from the holder of each Lien or encumbrance a written consent
and subordination to the security interest hereby granted, or a written
disclaimer of any interest in the Collateral, in a form acceptable to Agent in
its reasonable judgment.
SECTION 5.3 Additional Acquisitions. Debtor shall promptly notify Agent
in writing of its acquisition, by purchase, lease, or otherwise, of any material
after-acquired Equipment, including a description of the Equipment and of its
present locations and (if different) its intended permanent locations.
Section 6
PROVISIONS CONCERNING GENERAL INTANGIBLES
SECTION 6.1 Title to General Intangibles. Debtor represents and
warrants that all of the General Intangibles assigned to Agent or in which
Debtor grants Agent a Lien are owned by Debtor.
SECTION 6.2 Intellectual Property.
(a) A true and complete schedule setting forth all patents, federal and/or
state trademarks, service marks, trade name or brand name registrations and
copyright registrations, and all pending applications and applications (other
than intent to use applications) to be filed therefore, owned or controlled by
Debtor or licensed to Debtor is contained in SCHEDULE 2.1(d)(x) hereto. No
licenses, sublicenses, covenants, or agreements have been entered into by Debtor
in respect of any of such items, and each such item is in full force and effect,
free and clear of all Liens and encumbrances of every nature, is not currently
being challenged in any way, and is not involved in any pending (or, to the
knowledge of Debtor, threatened) interference proceeding.
(b) Concurrently with its execution and delivery of this Security
Agreement and Assignment, Debtor shall execute and deliver to Agent collateral
assignments of all registered
-9-
patents, trademarks, trade names, copyrights, and applications (other than
intent to use applications) for any of them, in a form satisfactory to Agent
and suitable for recording in the records of the registering authority.
SECTION 6.3 Contracts and Leases.
(a) SCHEDULE 4.1(o) and SCHEDULE 4.1(n) of the Credit Agreement are,
respectively, true and complete lists (i) of all leases of real property and
(ii) of all Material Agreements to which Debtor is a party. Debtor represents
and warrants that each of the leases, contracts, and other agreements listed on
such Schedules is in full force and effect; that neither Debtor nor, to Debtor's
knowledge, any other party thereto is in default under or in breach of the terms
or conditions of any such lease, contract, or other agreement; and that there
has not occurred any event of default or event that, after the giving of notice
or the lapse of time or both, would constitute a default under or breach of any
such lease.
(b) Debtor shall not amend, modify or supplement any Material Agreement or
waive any provision thereof other than in the ordinary course of business,
without the prior written consent of the Agent, which consent will not be
unreasonably withheld.
(c) Debtor shall remain liable to perform all of its duties and
obligations under any leases, contracts, and agreements included in the
Collateral to the same extent as if this Security Agreement and Assignment had
not been executed, and Agent shall not have any obligation or liability under
such leases, contracts, and agreements by reason of this Security Agreement and
Assignment or otherwise.
Section 7
OTHER PROVISIONS CONCERNING COLLATERAL
SECTION 7.1 Title. Debtor has good title to the Collateral, and the
Liens granted to Agent pursuant to this Security Agreement and Assignment are
fully perfected first priority Liens in and to the Collateral with priority over
the rights of every person in the Collateral other than the rights of Debtor and
other than Permitted Liens, and the Collateral is free, clear, and unencumbered
by any Liens in favor of any person other than Agent except for Permitted Liens.
SECTION 7.2 Further Assurances. Debtor shall execute and deliver to
Agent, concurrent with Debtor's execution of this Security Agreement and
Assignment and at any time or times hereafter at the request of Agent, all
financing statements, continuation financing statements, fixture filings,
security agreements, chattel mortgages, assignments, endorsements of
certificates of title, applications for titles, affidavits, reports, notices,
schedules of accounts, letters of authority, and all other documents Agent may
reasonably request, in form satisfactory to Agent, to perfect and
-10-
maintain perfected Agent's Liens in the Collateral and in order to consummate
fully all of the transactions contemplated under the Loan Documents. Debtor
hereby irrevocably makes, constitutes, and appoints Agent (and any of Agent's
officers, employees, or agents designated by Agent) as Debtor's true and
lawful attorney with power to sign the name of Debtor on any of the
above-described documents or on any other similar documents that need to be
executed, recorded, and/or filed in order to perfect or continue perfected
Agent's Liens in the Collateral. The appointment of Agent as Debtor's
attorney is irrevocable as long as any Secured Obligations are outstanding.
Any person dealing with Agent shall be entitled to rely conclusively on any
written or oral statement of Agent that this power of attorney is in effect.
SECTION 7.3 Transfer of Collateral. Debtor shall not sell, lease,
license, transfer, or otherwise dispose of any interest in any Collateral except
for sales of Inventory in the ordinary course of its business (sales of
Inventory in full or partial satisfaction of existing obligations of Debtor are
not considered to be sales in the ordinary course of business) and except for
sales, transfers or other dispositions permitted by SECTION 5.2(g) of the Credit
Agreement.
SECTION 7.4 Agent's Duty of Care. Agent shall have no duty of care with
respect to the Collateral except that Agent shall exercise reasonable care with
respect to the Collateral in Agent's custody. Agent shall be deemed to have
exercised reasonable care if such property is accorded treatment substantially
equal to that which Agent accords its own property or if Agent takes such action
with respect to the Collateral as the Debtor shall request or agree to in
writing, provided that no failure to comply with any such request nor any
omission to do any such act requested by the Debtor shall be deemed a failure to
exercise reasonable care. Agent's failure to take steps to preserve rights
against any parties or property shall not be deemed to be failure to exercise
reasonable care with respect to the Collateral in Agent's custody. All risk of
loss, damage, or destruction of the Collateral shall be borne by Debtor.
SECTION 7.5 Debtor's Contracts. Debtor shall remain liable to perform
its obligations under any contracts and agreements included in the Collateral to
the same extent as though this Security Agreement and Assignment had not been
entered into, and Agent shall not have any obligation or liability under such
contracts and agreements by reason of this Security Agreement and Assignment or
otherwise.
SECTION 7.6 Reinstatement of Liens. If at any time after payment in
full of all Secured Obligations and termination of Agent's Liens, any payment on
Secured Obligations previously made must be disgorged by Agent for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy, or
reorganization of Debtor or any Guarantor), this Security Agreement and
Assignment and Agent's Liens granted hereunder shall be reinstated as to all
disgorged payments as though such payments had not been made, and Debtor shall
sign and deliver to Agent all documents and things necessary to reperfect all
terminated Liens.
-11-
SECTION 7.7 Agent Expenses. If Debtor fails to pay any moneys (whether
taxes, assessments, insurance premiums, or otherwise) due to third persons or
entities, fails to make any deposits or furnish any required proof of payment or
deposit, or fails to discharge any Lien prohibited hereby, all as required under
the terms of this Security Agreement and Assignment, then Agent may, to the
extent that it determines that such failure by Debtor could have a material
adverse effect on Agent's interests in the Collateral, in its discretion and
with three (3) days prior notice to Debtor, make payment of the same or any part
thereof. Any amounts paid or deposited by Agent shall constitute Agent
Expenses, shall become part of the Secured Obligations and shall be secured by
the Collateral. Any payments made by Agent shall not constitute (a) an
agreement by Agent to make similar payments in the future or (b) a waiver by
Agent of any Event of Default under this Security Agreement and Assignment.
Agent need not inquire as to, or contest the validity of, any such expense, tax,
security interest, encumbrance, or Line, and the receipt of the usual official
notice for the payment of moneys to a governmental entity shall be conclusive
evidence that the same was validly due and owing.
Debtor shall immediately and without demand reimburse Agent for all sums
expended by Agent that constitute Agent Expenses, and Debtor hereby authorizes
and approves all advances and payments by Agent for items constituting Agent
Expenses.
SECTION 7.8 Inspection of Collateral and Records. Subject to and
consistent with the provisions of SECTIONS 5.1(h) and 5.1(m) of the Credit
Agreement, during Debtor's usual business hours, Agent may inspect and examine
the Collateral and check and test the same as to quality, quantity, value and
condition. Agent shall also have the right at any time or times hereafter,
during Debtor's usual business hours or during the usual business hours of any
third party having control over the records of Debtor, to inspect and verify
Debtor's Books in order to verify the amount or condition of, or any other
matter relating to, the Collateral and Debtor's financial condition and to copy
and make extracts therefrom. Debtor waives the right to assert a confidential
relationship. If any, it may have with any accounting firm and/or service
bureau in connection with any information requested by Agent pursuant to this
Security Agreement and Assignment and agrees that Agent may directly contact any
such accounting firm and/or service bureau in order to obtain such information.
Section 8
COVENANTS
SECTION 8.1 Encumbrance of Assets. Debtor shall not create, incur,
assume, or permit to exist any Lien on any asset now owned or hereafter acquired
by Debtor, except for Liens to Agent and Permitted Liens or as otherwise
provided by SECTION 5.2(c).
-12-
SECTION 8.2 Condition and Repair. Debtor shall maintain in good repair
and working order all properties used in its business and from time to time
shall make all appropriate repairs and replacements thereof.
SECTION 8.3 Insurance. Debtor shall maintain, with financially sound
and reputable insurers, insurance with respect to the Collateral against loss or
damage of the kinds and in the amounts customarily insured against by
corporations of established reputation engaged in the same or similar
businesses. Each such policy shall name Agent as an additional insured and,
where applicable, as loss payee under a lender loss payable endorsement
satisfactory to Agent and shall provide for thirty (30) days' written notice to
Agent before such policy is altered or canceled. Debtor shall provide evidence
satisfactory to Agent that all such coverages are in full force and effect.
Section 9
EVENTS OF DEFAULT
Any of the following events shall be deemed an Event of Default or a
default hereunder:
(a) if default shall be made in payment or performance of any Secured
Obligations as and when the same shall become due and payable after the
expiration of the applicable grace period, if any; or
(b) if Debtor fails to perform or observe any other term, provision,
covenant or agreement of this Security Agreement and Assignment (within 15 days
of Debtor's receipt of written notice or actual knowledge thereof) or in any of
the Loan Instruments to which it is a party, and Debtor shall not cure such
failure within the applicable grace period, if any; or
(c) if there occurs an event of default under the Credit Agreement or any
other Loan Instrument; or
(d) if any warranty, representation, certification, financial statement or
other information made or furnished at any time pursuant to the terms of this
Security Agreement and Assignment, by Debtor or any Guarantor, shall prove to be
materially false as of the date made.
Section 10
REMEDIES
SECTION 10.1 General Remedies. Upon the occurrence of any Event of
Default, in addition to all other rights, powers and remedies conferred herein,
in the Credit Agreement or by law, the Agent may declare the Secured Obligations
immediately due, payable and performable, including
-13-
all principal and interest remaining unpaid on the Debtor's Notes and all
other amounts secured hereby, all without demand, presentment or notice, all
of which are expressly waived. The Agent shall also have, in addition to all
other rights provided herein, in the Credit Agreement, or by law, the rights
and remedies of Agent under the Code and applicable common law (regardless of
whether the Code is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the Code applies to the affected
Collateral), and further, but not by way of limitation, the Agent may take
(and/or may cause one or more of its designees to take) any or all of the
following actions upon the occurrence of any Event of Default:
(a) Notify other parties with respect to or interested in any item of the
Collateral of the Agent's interest therein or of any action proposed to be taken
with respect thereto, and direct one or more of those parties to make all
payments, distributions and proceeds otherwise payable to the Debtor with
respect thereto directly to the Agent or its order until notified by the Agent
that all the Secured Obligations have been fully paid and satisfied.
(b) Require the Debtor to, and the Debtor hereby agrees that it shall at
its expense and upon request of the Agent forthwith, assemble all or part of the
Collateral as directed by the Agent and make it available to the Agent at a
place to be designated by the Agent reasonably convenient to both parties.
(c) Receive and retain all payments, distributions and proceeds of any
kind with respect to any and all of the Collateral.
(d) Enter any premises where any item of Collateral may be located, with
or without permission or process of law but without breach of the peace, and
seize and remove such Collateral or remain upon such premises and use or dispose
of such Collateral as contemplated under this Security Agreement and Assignment.
(e) Request the judicial appointment of a receiver respecting the
Collateral or any portion thereof in any action, suit or proceeding in which
claims are asserted against the Collateral by the Agent or its designee,
irrespective of the solvency of the Debtor or any other person or the adequacy
of any Collateral, and without notice to or the approval of the Debtor, which
receiver shall have the power to manufacture, operate, sell, lease or rent such
items of Collateral pending the sale of all of the Collateral and to collect the
rent, issues and profits therefrom, together with such other powers as may have
been requested by the Agent and shall apply the amounts received (net of all
proper charges and expenses) to the Obligations as provided in this Security
Agreement and Assignment. Such a receiver may serve without bond or under such
minimal bond as may be required by applicable law.
(f) Reduce its claim to judgment or foreclose or otherwise enforce, in
whole or in part, the security interest created hereby by any available judicial
procedure.
-14-
(g) Take any action with respect to the offer, sale, lease or other
disposition, and delivery of the whole of, or from time to time any one or more
items of, the Collateral, including, without limitation: to sell, assign, lease
or otherwise dispose of the whole of, or from time to time any part of, the
Collateral, or offer or agree to do so, in any established market or at any
broker's board, private sale or public auction or sale (with or without demand
on the Debtor or any advertisement or other notice of the time, place or terms
of sale, except such reasonable notice of the time and place of any public sale
or the time after which a private sale or other disposition may be made as may
be required by the Code) for cash, credit or any other asset or property, for
immediate or future delivery, and for such consideration and upon such terms and
subject to such conditions as the Agent in its sole and absolute discretion may
determine. The requirements of reasonable notice shall be met if such notice is
mailed or delivered to the Debtor at the address designated at SECTION 12.4 at
least ten (10) days before the time of the sale or disposition. The Agent may
purchase (the consideration for which may consist in whole or in part of
cancellation of indebtedness) or any other person may purchase the whole or any
one or more items of the Collateral so sold free and clear of any and all
rights, powers, privileges, remedies and interests of the Debtor (which the
Debtor has expressly waived); to postpone or adjourn any such auction, sale or
other disposition or cause the same to be postponed or adjourned from time to
time to a subsequent time and place, or to abandon or cause the abandonment of
the same, all without any advertisement or other notice thereof; and to carry
out any agreement to sell any item or items of the Collateral in accordance with
the terms and provisions of such agreement, notwithstanding that, after the
Agent shall have entered into such an agreement, all the Obligations may have
been paid and satisfied in full. Agent may dispose of the Collateral in its
then existing condition or, at its election, may take such measures as it deems
necessary or advisable to refurbish, repair, improve, process, finish, operate,
demonstrate, and prepare for sale the Collateral and may store, ship, reclaim,
recover, protect, advertise for sale or lease, and insure the Collateral.
(h) Pay, purchase, contest, or compromise any encumbrance, charge, or Lien
that, in the opinion of Agent, appears to be prior or superior to its Lien and
pay all expenses incurred in connection therewith.
(i) Agent may (i) notify Account Debtors to make payment on Accounts, and
General Intangibles directly to Agent; (ii) settle, adjust, compromise, extend,
or renew Accounts, or General Intangibles, either before or after legal
proceedings to collect such Accounts, or General Intangibles have commenced;
(iii) prepare and file any bankruptcy proofs of claim or similar documents
against any Account Debtor; (iv) prepare and file any notice, assignment,
satisfaction, or release of Lien, UCC termination statement, or any similar
document; (v) sell or assign Accounts, and General Intangibles, individually or
in bulk, upon such terms, for such amounts, and at such time or times as Agent
deems advisable; and (vi) complete the performance required of Debtor under any
contract or agreement to which Debtor is a party and out of which Accounts, or
General Intangibles arise or may arise. Agent may use and operate Debtor's
Equipment for all such purposes.
-15-
(j) Agent may (i) endorse Debtor's name on all checks, notes, drafts,
money orders, or other forms of payment of or security for Accounts or other
Collateral; (ii) sign Debtor's name on drafts drawn on Account Debtors or
issuers of letters of credit; and (iii) notify the postal authorities in
Debtor's name to change the address for delivery of Debtor's mail to an address
designated by Agent, receive and open all Mail addressed to Debtor, copy all
mail, retain copies of all mail relating to Collateral, and hold all mail
available for pickup by Debtor.
(k) Exercise any voting, consent, enforcement or other right, power,
privilege, remedy or interest of the Debtor pertaining to any item of Collateral
to the same extent as if the Agent were the outright owner thereof.
(l) Take possession of and thereafter deal with or use from time to time
all or any part of the Collateral in all respects as if the Agent were the
outright owner thereof.
(m) At the Agent's sole and absolute discretion, retain the Collateral or
any part thereof in satisfaction of the Secured Obligations.
(n) Transfer or cause the transfer of the ownership of all or any part of
the Collateral to its own name and have such transfer recorded in any
jurisdiction(s) and publicized in any manner deemed appropriate by the Agent.
SECTION 10.2 Non-Judicial Remedies. In granting to the Agent the power
to enforce its rights hereunder without prior judicial process or judicial
hearing, the Debtor expressly waives, renounces and knowingly relinquishes any
legal right which might otherwise require the Agent to enforce its rights by
judicial process. In so providing for non-judicial remedies, the Debtor
recognizes and concedes that such remedies are consistent with the usage of
trade, are responsive to commercial necessity, and are the result of a bargain
at arm's length. Nothing herein is intended to prevent the Agent from resorting
to judicial process at its option.
SECTION 10.3 Proceeds. The Agent shall collect the cash and non-cash
proceeds received from any sale or other disposition or from any other source
contemplated by SECTION 10.1, and, after deducting all reasonable costs and
expenses incurred by the Agent and any person designated by the Agent to take
any of the action enumerated in this Security Agreement and Assignment in
connection with such collection and sale or disposition (including reasonable
attorneys' disbursements, expenses and reasonable fees and the reasonable fees
and expenses of any appraisers or consultants employed by Agent), the Agent in
its discretion may retain the same as additional or substitute Collateral or may
apply the same in accordance with the terms and provisions of this Security
Agreement and Assignment. In the event any funds remain after satisfaction in
full of the Secured Obligations, then the remainder shall be returned to the
Debtor, subject, however, to any other rights or interests the Agent may have
therein under any other instrument, agreement or document or applicable law.
-16-
SECTION 10.4 Application of Proceeds. Any funds received from or on
behalf of the Debtor (whether pursuant to the terms and provisions of this
Security Agreement and Assignment or otherwise) by the Agent shall be applied to
the following items in such manner and order as the Agent may determine in its
sole and absolute discretion.
(a) The payment to or reimbursement for any fees and expenses for which
the Agent is entitled to be paid or reimbursed pursuant to any of the provisions
of this Security Agreement and Assignment.
(b) The payment of accrued and unpaid interest on the Secured Obligations.
(c) The payment of the outstanding principal on the Secured Obligations.
(d) The payment in full of all other Obligations under this Security
Agreement and Assignment.
All advances and payments made pursuant to this Security Agreement and
Assignment may be recorded by the Agent on its books and records, and such books
and records shall be conclusive absent manifest error as to the existence and
amounts thereof.
SECTION 10.5 Deficiency. If the amount of all proceeds received with
respect to and in liquidation of the Collateral that shall be applied to payment
of the Secured Obligations shall be insufficient to pay and satisfy all of the
Secured Obligations in full, the Debtor acknowledges that it shall remain liable
for any deficiency, together with interest thereon and costs of collection
thereof (including attorneys' disbursements, expenses and reasonable fees and
the reasonable fees of any appraisers or consultants employed by Agent), and in
accordance with the terms and provisions of this Security Agreement and
Assignment.
SECTION 10.6 Other Recourse. The Debtor waives any right to require the
Agent to proceed against any other person, exhaust or marshal any Collateral or
other security for the Secured Obligations, or pursue any other remedy in the
Agent's power. Until all of the Secured Obligations shall have been paid in
full, the Debtor shall have no right to subrogation and the Debtor waives the
right to enforce any remedy which the Agent has or may hereafter have against
any other party liable for the Secured Obligations, and waives any benefit of
and any right to participate in any other security whatsoever now or hereafter
held by the Agent.
SECTION 10.7 Remedies Not Exclusive. All rights, powers and remedies
conferred in this SECTION 10 are cumulative, and not exclusive, of: (i) any and
all other rights and remedies herein conferred or provided for; (ii) any and all
other rights, powers and remedies conferred or provided for in the Credit
Agreement or in any other Loan Document; and (iii) any and all rights, powers
and remedies conferred, provided for or existing at law or in equity, and the
Agent shall, in addition to
-17-
the rights, powers and remedies herein conferred or provided for, be entitled
to avail itself of all such other rights, powers and remedies as may now or
hereafter exist at law or in equity for the collection of and enforcement of
the Secured Obligations and the enforcement of the representations,
warranties, agreements, covenants and indemnities contained in this Security
Agreement and Assignment, the Credit Agreement and in any other Loan
Document. The Agent, in its sole discretion, may proceed to exercise or
enforce any right, power, privilege, remedy or interest that the Agent may
have under this Security Agreement and Assignment, the Credit Agreement any
other Loan Document, or applicable law, without notice except as otherwise
expressly provided herein; without pursuing, exhausting or otherwise
exercising or enforcing any other right, power, privilege, remedy or interest
that the Agent may have against or in respect of the Debtor or the
Collateral, or other person or thing, and without regard to any act or
omission of the Agent or any other person. The Agent may institute separate
proceedings with respect to this Security Agreement and Assignment in such
order and at such times as the Agent may elect in its sole and absolute
discretion. This Security Agreement and Assignment may be enforced without
possession of any Note or its production in any action, suit or proceeding.
SECTION 10.8 Equitable Relief. The Debtor acknowledges that it will be
impossible to measure in money the damage to the Agent in the event of a breach
of any of the terms and provisions of this Security Agreement and Assignment,
and the Debtor agrees that, in the event of any such breach, the Agent will not
have an adequate remedy at law, although the foregoing shall not constitute a
waiver of any of the Agent's rights, powers, privileges and remedies against or
in respect of a breaching party, any Collateral or any other person or thing
under this Security Agreement and Assignment or applicable law. It is therefore
agreed that the Agent, in addition to all other such rights, powers, privileges
and remedies that it may have, shall be entitled to injunctive relief, specific
performance or such other equitable relief as the Agent may request to exercise
or otherwise enforce any of the terms and provisions of this Security Agreement
and Assignment and to enjoin or otherwise restrain any act prohibited thereby,
and the Debtor will not urge and hereby waives any defense that there is an
adequate remedy of law.
SECTION 10.9 License. Agent is hereby granted a license or other right
to use, without charge, Debtor's patents, copyrights, trade secrets, technical
processes, rights of use of any name, trade names, trademarks, labels, and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral, and Debtor's rights under all licenses and shall inure to Agent's
benefit.
SECTION 10.10 Power of Attorney. Debtor hereby appoints Agent (and any of
Agent's officers, employees, nominees, designees or agents designated by Agent)
as Debtor's attorney, with power after the occurrence of an Event of Default and
at any time Agent reasonably believes an Event of Default has occurred or is
likely to occur with the passage of time, with respect to the various assets and
properties included in the Collateral, and in addition to any other powers of
attorney contained herein: (a) to take possession of and endorse (to Agent or
otherwise) Debtor's
-18-
name on any checks, bills of exchange, notes, acceptances, money orders,
drafts, or other documents, forms of payment or security received in payment
for or on account of those assets and properties; (b) demand, collect and
receive any monies due on account of those assets and properties and give
receipts and acquittances in connection therewith; (c) negotiate and
compromise any claim, and commence, prosecute, defense, settle or withdraw
and claims, suits or proceedings pertaining to or arising out of those assets
and properties; (d) pay any indebtedness or other liability or perform any
other Secured Obligation required to be paid or performed under this Security
Agreement and Assignment or the Credit Agreement by the Debtor; (e) prepare
and execute on behalf of the Debtor any mortgage, financing statement or
other evidence of a security interest contemplated by this Security Agreement
and Assignment, or any modification, refiling, continuation or extension
thereof; (f) to sign Debtor's name on drafts against Account Debtors, on
schedules and assignments of Accounts, on verifications of Accounts, and on
notices to Account Debtors; (g) to notify the post office authorities to
change the address for delivery of Debtor's mail to an address designated by
Agent, to receive and open all mail addressed to Debtor, and to retain copies
of all mail relating to the Collateral and hold all mail available for pick
up by Debtor; (h) to send requests for verification of Accounts; (i) take any
other action contemplated by this Security Agreement and Assignment or the
Credit Agreement; (j) sign, execute, acknowledge, swear to, verify, deliver,
file, record and publish any one or more of the foregoing; and (k) to do all
things necessary to carry out this Security Agreement and Assignment. The
appointment of Agent as Debtor's attorney and each and every one of Agent's
rights and powers, being coupled with an interest, are irrevocable as long as
any Secured Obligations are outstanding. Any person dealing with Agent shall
be entitled to rely conclusively on any written or oral statement of Agent
that this power of attorney is in effect. This Power of Attorney shall
survive the dissolution, reorganization or bankruptcy of the Debtor and shall
extend to and be binding upon the Debtor's successors, assigns, heirs and
legal representatives. To the extent permitted by applicable law, the Debtor
hereby ratifies and approves all acts of any such attorney and agrees that
neither the Agent nor any such attorney will be liable for any acts or
omissions nor for any error of judgment or mistake of fact or law other than
their gross negligence, willful misconduct or unlawful misconduct. Agent may
also use Debtor's stationary solely in connection with exercising its rights
and remedies hereunder and performing the Obligations of Debtor.
SECTION 10.11 Expenses Secured. The Debtor agrees to pay on demand all
reasonable costs and expenses, if any (including reasonable counsel, consultant
and appraiser fees and expenses), in connection with the exercise and
enforcement (whether through negotiations, legal proceedings or otherwise) of
Agent's rights and remedies provided by this Security Agreement and Assignment,
the Credit Agreement or any other Loan Document, or which by law shall be
payable by the Debtor, expressly including all such costs and expenses incurred
by the Agent in connection with or during the pendency of any bankruptcy or
insolvency proceedings involving the Debtor or any Guarantor. All such expenses
shall be part of the Secured Obligations, and shall be secured by the
Collateral.
-19-
SECTION 10.12 Miscellaneous. The Debtor acknowledges and agrees that the
rights, powers, privileges, remedies and interests conferred upon the Agent in
respect of the Collateral by this Security Agreement and Assignment and
applicable law are solely to enable the Agent to protect and preserve the
Collateral, as well as to realize upon it in accordance with this Security
Agreement and Assignment, all in such manner as the Agent in its discretion may
elect, and shall not impose upon the Agent any duty or other obligation to
exercise or enforce any such right, power, privilege, remedy or interest. Any
exercise or other enforcement of any such right, power, privilege, remedy or
interest, if undertaken by the Agent in its discretion, may be delayed,
discontinued or otherwise not pursued or exhausted for any reason whatsoever
(whether intentionally or otherwise). Without limiting the generality of the
foregoing, the Agent shall be under no duty or obligation to protect or preserve
any of the Collateral, perform any obligation or duty of the Debtor under any of
the Collateral, or take any action to mitigate or otherwise reduce any damage or
other loss or to otherwise collect, exercise or enforce any claim, right or
other interest arising under or with respect to the Collateral, except as
specifically provided in this Security Agreement and Assignment.
Section 11
RIGHT OF SET-OFF
SECTION 11.1 Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default, the Agent hereby is authorized at any time
and from time to time, without notice to the Debtor (any such notice being
hereby expressly waived by the Debtor), to set-off and apply, directly or
through any of its affiliates, custodians, participants and designees, any and
all deposits (whether general or special, time or demand, provisional or final,
or individual or joint) and other assets and properties at any time held in the
possession, custody or control of the Agent and any of its affiliates,
custodians, participants and designees, and any indebtedness or other amount at
any time held in the possession, custody or control of the Agent and any of its
affiliates, custodians, participants and designees, and any indebtedness or
other amount at any time owing by the Agent or any of its
affiliates or participants, to or for the credit, account or benefit of the
Debtor against any and all of the Secured Obligations now or hereafter
existing, whether or not the Agent shall have declared a default, accelerated
the Secured Obligations or made any demand or taken any other action under
this Security Agreement and Assignment, and although such Secured Obligations
may be unmatured. The Debtor acknowledges that pursuant to SECTION 2.1(f)
hereof it granted to the Agent a senior security interest in and to, among
other things, all such deposits, assets, properties and indebtedness in the
possession of the Agent's affiliates, custodians, participants and designees,
and the Debtor hereby authorizes any such person to so set-off and apply such
amounts at such times and in such manner as the Agent may direct pursuant to
this SECTION 11.1. The Agent shall notify the Debtor after any such set-off
and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. In debiting
any such account, the Secured Obligations shall be deemed to have been paid
or repaid only to the extent of the funds actually available in the account
notwithstanding any internal procedure of the Agent or any of its
-20-
affiliates, custodians, participants and designees to the contrary. The
rights of the Agent under this Section are in addition to and without
limitation of any other rights, powers, privileges, remedies and other
interests (including, without limitation, other rights of set-off and
security interests) that the Agent may have under this Security Agreement and
Assignment and applicable law.
Section 12
MISCELLANEOUS PROVISIONS
SECTION 12.1 Delay and Waiver. No delay or omission to exercise any
right shall impair any such right or be a waiver thereof, but any such right may
be exercised from time to time and as often as may be deemed expedient. A
waiver on one occasion shall be limited to that particular occasion.
SECTION 12.2 Severability; Headings. If any part of this Security
Agreement and Assignment or the application thereof to any person or
circumstance is held invalid, the remainder of this Security Agreement and
Assignment shall not be affected thereby. The section headings herein are
included for convenience only and shall not be deemed to be a part of this
Security Agreement and Assignment.
SECTION 12.3 Binding Effect. This Security Agreement and Assignment
shall be binding upon and inure to the benefit of the respective legal
representatives, successors, and assigns of the parties hereto; however, Debtor
may not assign any of its rights or delegate any of its obligations hereunder.
Agent (and any subsequent assignee) may transfer and assign this Security
Agreement and Assignment and deliver the Collateral to the assignee, who shall
thereupon have all of the rights of Agent; and Agent (or such subsequent
assignee who in turn assigns as aforesaid) shall then be relieved and discharged
of any responsibility or liability with respect to this Security Agreement and
Assignment and said Collateral.
SECTION 12.4 Notices. Any notices under or pursuant to this Security
Agreement and Assignment shall be deemed duly sent when delivered in hand or
when mailed by registered or certified mail, return receipt requested, or when
delivered by courier or when transmitted by facsimile, telecopy, or similar
electronic medium to the following addresses:
To Debtor: ASI LANDMARK, INC.
c/o Analytical Surveys, Inc.
1935 Jamboree Drive
Colorado Springs, Colorado 80920
Attention: Scott C. Benger
Telecopy: (719) 528-5093
-21-
With a copy to: Steven D. Miller, Esq.
Sherman & Howard L.L.C.
633 17th Street, Suite 3000
Denver, Colorado 80202
Telecopy: (303) 298-0940
To Agent: Bank One, Colorado, N.A.
30 Pikes Peak Avenue
Colorado Springs, Colorado 80903
Attention : Shaun P. McCarthy
Vice President
Telecopy: (719) 471-5213
With a copy to: Ted R. Sikora II, Esq.
Davis, Graham & Stubbs LLP
370 Seventeenth Street, Suite 4700
Denver, Colorado 80202
Telecopy: (303) 893-1379
Either party may change such address by sending notice of the change to the
other party; such change of address shall be effective only upon actual receipt
of the notice by the other party.
SECTION 12.5 CONSENT TO JURISDICTION. ANY LEGAL ACTION OR OTHER
PROCEEDING WITH RESPECT TO THIS SECURITY AGREEMENT AND ASSIGNMENT OR ANY OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF COLORADO OR OF THE
UNITED STATES LOCATED IN THE CITY AND COUNTY OF DENVER (TO THE EXTENT THAT SUCH
COURTS WOULD OTHERWISE HAVE SUBJECT MATTER JURISDICTION), AND BY EXECUTION AND
DELIVERY OF THIS SECURITY AGREEMENT AND ASSIGNMENT, EACH OF THE DEBTOR AND THE
AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION
OF THOSE COURTS. EACH OF THE DEBTOR AND THE AGENT IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
SECURITY AGREEMENT AND ASSIGNMENT OR ANY OTHER LOAN DOCUMENTS. THE DEBTOR AND
THE AGENT EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY COLORADO LAW.
SECTION 12.6 WAIVER OF JURY TRIAL AND CERTAIN DAMAGES. EACH OF THE
DEBTOR AND THE AGENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH, OR ARISING OUT OF THIS SECURITY AGREEMENT AND ASSIGNMENT OR ANY OTHER LOAN
DOCUMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT
THEREOF; AND THE DEBTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
-22-
LAW, THE RIGHT TO INTERPOSE ANY SETOFF OR COUNTERCLAIM OR CROSS-CLAIM IN
CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH SETOFF,
COUNTERCLAIM OR CROSS-CLAIM EXCEPT TO THE EXTENT THAT THE FAILURE SO TO ASSERT
ANY SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM WOULD PERMANENTLY PRECLUDE THE
PROSECUTION OF OR RECOVERY UPON THE SAME. NOTWITHSTANDING ANYTHING CONTAINED IN
THIS SECURITY AGREEMENT AND ASSIGNMENT OR ANY OTHER LOAN DOCUMENTS TO THE
CONTRARY, NO CLAIM MAY BE MADE BY THE DEBTOR AGAINST THE AGENT FOR ANY LOST
PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
BREACH OR WRONGFUL CONDUCT (OTHER THAN WILLFUL MISCONDUCT CONSTITUTING ACTUAL
FRAUD) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENTS, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND THE DEBTOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES.
THE DEBTOR AGREES THAT THIS SECTION 12.6 IS A SPECIFIC AND MATERIAL ASPECT OF
THIS SECURITY AGREEMENT AND ASSIGNMENT AND ACKNOWLEDGES THAT THE AGENT WOULD NOT
EXTEND TO THE DEBTOR ANY ADVANCES PURSUANT TO THE CREDIT AGREEMENT IF THIS
SECTION 12.6 WERE NOT PART OF THIS SECURITY AGREEMENT AND ASSIGNMENT.
SECTION 12.7 Governing Law. All acts and transactions hereunder and the
rights and obligations of the parties hereto shall be governed, construed, and
interpreted in accordance with the domestic laws of Colorado.
IN WITNESS WHEREOF, the Debtor and the Agent have executed this Security
Agreement and Assignment by their duly authorized officers as of the date first
above written.
AGENT: DEBTOR:
BANK ONE, COLORADO, N.A. ASI LANDMARK, INC.
By:______________________________ By:________________________________
Shaun P. McCarthy Scott C. Benger
Vice President Vice President
-23-
-24-