EXHIBIT 10.2 SECURITY AGREEMENT WITH PRESLEY AND PATRICIA STACEY REED AND RAYMOND AND JOAN BONANNO DATED DECEMBER 5, 2011

1.  Grant of Security Interest.  The Grantor hereby pledges, collaterally assigns and grants to the Secured Parties as security for all present and future obligations, indebtedness and liabilities of all kinds of the Grantor to the Secured Parties under the Reed Debt, the BonAnno Debt, the Notes, the Loan Agreement, the Revenue Participation Agreement, and the transaction contemplated by any of the foregoing (collectively referred to as the “Secured Obligations”), a continuing security

 

(a)  Except for the security interests granted hereby and in connection with the loans to the Grantor by ALT, LLC, a Colorado limited liability company, ALT II, LLC, a Colorado limited liability company, and ALT III, LLC, a Colorado limited liability company, dated March 1, 2008 (the “ALT Debt”), and under any Permitted Liens, the Grantor is, and as to Collateral acquired after the date hereof the Grantor shall and will be at the time of acquisition, the record and beneficial owner and holder of the Collateral free from any adverse claim, security interest, pledge, encumbrance, lien, charge, or other right, title or interest of any person other than the Secured Parties, and covenants that at all times the Collateral will be and remain free of all such adverse claims, security interests, pledges, encumbrances, liens, charges or other adverse interests by third parties.

(b)  The Grantor has full power and lawful authority to enter into this Agreement and to grant to the Secured Parties a security interest in the Collateral as herein provided, all of which have been duly authorized by all necessary corporate action.

(c)  The execution and delivery and the performance hereof are not in contravention of any provision of the Grantor’s articles of organization or bylaws, or of any instrument or undertaking to which the Grantor is a party or by which the Grantor or its property is bound.

(d)  This Agreement constitutes the valid and legally binding obligation of the Grantor enforceable in accordance with its terms.

(e)  The Grantor will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein.  Any officer or representative acting for or on behalf of the Grantor in connection with this Agreement or any aspect hereof, or entering into or executing this Agreement on behalf of the Grantor, has been duly authorized to do so and is fully empowered to act for and represent the Grantor in connection with this Agreement and all matters related thereto or in connection therewith.

(f)  For so long as the Secured Obligations remain outstanding, the Grantor agrees that it will not, absent prior written consent of the Secured Parties, impose any security interest upon any of the Collateral, except for Permitted Liens.

(g)  Grantor’s principal place of business and chief executive office is in Denver, Colorado.  Grantor shall not change the location of its principal place of business or chief executive office without twenty (20) days prior written notice to the Secured Parties.

(h)  The preamble hereof states the correct legal name of the Grantor.  Grantor shall not change its corporate name, nor do business under any name other than names currently in use and registered for use in accordance with applicable law, unless the Grantor has delivered to the Secured Parties written notice of such other names at least twenty (20) days prior to the date of first use thereof by the Grantor.

(i)  Other than in connection with the ALT Debt, the Reed Debt, the BonAnno Debt, and Permitted Liens, the Grantor is not obligated under any pledge, charge, financing statement or security agreement which covers any of the Collateral.

(j)  As long as any amount remains unpaid on any of the Secured Obligations or under any agreement entered into in connection with the Secured Obligations, except as expressly permitted by any such agreement, and except for Permitted Liens (A) the Grantor will not enter into or execute any pledge, charge, security agreement or financing statement covering the Collateral, other than those pledges, charges, security agreements and financing statements in favor of the Secured Parties hereunder, and (B) the Grantor shall not file or consent to the filing of any pledge, financing statement or statements (or any documents or papers filed as such) covering the Collateral, other than financing statements in favor of the Secured Parties hereunder, unless in any case the prior written consent of the Secured Parties shall have been obtained.

(k)  The Grantor authorizes the Secured Parties to file, in their discretion, in jurisdictions where this authorization will be given effect, a financing statement, personal property security act filing or other instrument for filing required by any jurisdiction applicable to the Collateral signed only by the Secured Parties covering the Collateral.  At the request of the Secured Parties, the Grantor will join the Secured Parties in executing such instruments as the Secured Parties may determine from time to time to be necessary or desirable under provisions of any applicable Uniform Commercial Code (“UCC”), personal property security act or other applicable laws in effect where the Collateral is located or where the Grantor conducts business; without limiting the generality of the foregoing, the Grantor agrees to join the Secured Parties, at the Secured Parties’ request, in executing one or more financing statements or other instruments in form satisfactory to the Secured Parties, and the Grantor will pay the costs of filing or recording the same in all public offices at any time and from time to time whenever filing or recording of any such financing statement or other instrument is deemed by the Secured Parties to be necessary or desirable.

3.  Further Assurances.  The Grantor agrees to take such actions and to execute such stock powers or other instruments and such other or different writings as the Secured Parties may

 

The occurrence of an Event of Default under the Notes shall constitute an “Event of Default” hereunder.

(a)  The Secured Parties shall have and may exercise with reference to the Collateral and the Secured Obligations any and all of the rights and remedies of a secured party under the UCC, and as otherwise granted herein or under any other applicable law, including, without limitation, the right and power to sell, at public or private sale or sales, or otherwise dispose of, or otherwise utilize the Collateral and any part or parts thereof in any manner authorized or permitted under the UCC after default by a debtor, and to apply the proceeds thereof toward payment of any costs and expenses and attorneys’ fees and expenses thereby incurred by the Secured Parties and toward payment of the Secured Obligations in such order or manner as permitted by law.  Specifically, and without limiting the foregoing, the Secured Parties shall have the right to take possession of all or any part of the Collateral, any certificate therefor, or any security therefor and of all books, records, papers and documents of the Grantor or in the Grantor’s possession or control relating to the Collateral, which are not already in the Secured Parties’ possession, and for such purpose may enter upon any premises upon which any of the Collateral or any security therefor or any of said books, records, papers and documents are situated and remove the same therefrom without any liability for trespass or damages thereby occasioned.  To the extent permitted by law, the Grantor expressly waives any notice of sale or other disposition of the Collateral and all other rights or remedies of the Grantor or formalities prescribed by law relative to sale or disposition of the Collateral or exercise of any other right or remedy of the Secured Parties existing after default hereunder.  The Secured Parties shall have all other rights and remedies available, whether at law or in equity.

(b)  The Secured Parties shall be entitled, as a matter of absolute right and without regard to the value of any security for the Secured Obligations or the solvency of any person liable therefor, to the appointment of a receiver for the Collateral on ex parte application to any court of competent jurisdiction.  The Grantor waives any right to any hearing or notice of hearing prior to the appointment of a receiver.  Such receiver and his agents shall be empowered to take possession of the Collateral and generally to do anything that the Grantor could legally do if the Grantor were in possession of the Collateral.  All expenses incurred by the receiver or his agents, including obligations to repay funds borrowed by the receiver, shall constitute a part of the Secured Obligations.  Any revenues collected by the receiver shall be applied first to the expenses of the receivership, including attorneys’ fees incurred by the receiver and by the Secured Parties, together with interest thereon at the default rate under the Notes from the date incurred until repaid, and the balance shall be applied toward the Secured Obligations or in such other manner as the court may

 

(c)  Upon notice by the Secured Parties to the Grantor, the Secured Parties or its nominee or nominees shall have the sole and exclusive right to exercise all voting and consensual powers pertaining to the Collateral or any part thereof and may exercise such powers in such manner as the Secured Parties may elect.

(d)  All rights to marshaling of assets of the Grantor, including any such right with respect to the Collateral, are hereby waived by the Grantor.

(a)  All rights of the Secured Parties hereunder, and all obligations of the Grantor hereunder, shall be absolute and unconditional irrespective of (i) any lack of validity or enforceability of any provision of the Loan Agreement, the Notes, any agreement with respect to the Secured Obligations, or any other agreement or instrument relating to any of the foregoing, (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Loan Agreement, the Notes or any other transaction document, (iii) any exchange, release or non-perfection of any Collateral or any other security for or Collateral securing the Secured Obligations, or any release or amendment or waiver of or any consent to or departure from any guarantee or any other security, for all or any of the Secured Obligations or (iv) any other circumstance which might

 

(b)  The Secured Parties are hereby subrogated to all of the Grantor’s interests, rights and remedies in respect to the Collateral and all security now or hereafter existing with respect thereto and all guaranties and endorsements thereof and with respect thereto.

This Agreement and the security interests created hereunder shall terminate when all the Secured Obligations have been paid in full, at which time the Secured Parties shall execute and deliver to the Grantor all documents which the Grantor shall reasonably request to evidence termination of such security interest and shall return physical possession of any Collateral then held by the Secured Parties to the Grantor.

The Grantor agrees to furnish the Secured Parties from time to time such additional information and copies of such documents relating to this Agreement, the Collateral, the Secured Obligations and the Grantor’s financial condition as the Secured Parties may reasonably request.

Any communication, notice or demand to be given hereunder shall be in writing and given in the manner and to the addresses set forth in the Loan Agreement.