EXHIBIT 10.25
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made as of the 1st day of July,
2001, by XXXXXXX X. ORDER, M.D., P.C., a professional corporation organized
under the laws of the State of New York ("Debtor"), for the benefit of ISOTOPE
SOLUTIONS, INC., a New York corporation ("Creditor").
1. DEFINITIONS OF TERMS USED HEREIN.
(a) "Collateral" means all of Debtor's right, title and interest in,
to and under the following:
(i) all of Debtor's accounts, proceeds from accounts,
contract rights, instruments, documents, chattel paper,
including but not limited to Debtor's rights under any
and all agreements (collectively the "Income Sources");
(ii) all guarantees, security, and liens that Debtor may hold
for the payment of performance of any item of Collateral
(including, without limitation, all rights of stoppage
in transit, replevin, and reclamation and as an unpaid
vendor or lienor);
(iii) all rights to goods represented by any item of
Collateral or the sale of which goods gave rise to any
item of Collateral including, without limitation, all
rights upon return, replevin, or repossession of such
goods, all documents of title, warehouse receipts, bills
of lading, books, records and other documents relating
to any of the Collateral;
(iv) Debtor's goodwill;
(v) all books, records, and lists, related to the Collateral
in whatever form maintained;
(vi) to the extent not otherwise included, all Proceeds of
each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits
and products of each of the foregoing.
(b) "Liability" or "liabilities" means all obligations of Debtor to
the Creditor, whether now existing or hereafter arising, under the Note.
(c) "Note" means the Revolving Note of Debtor to the Creditor of even
date herewith in the aggregate unpaid principal amount of Two Hundred Thousand
Dollars ($200,000).
(d) "Proceeds" means whatever is received when Collateral is sold,
exchanged, licensed, leased, collected or otherwise disposed of (whether
permanently, temporarily, exclusively or nonexclusively) and includes the
account arising when the right to payment is earned under a contract.
(e) "Security Interest" means a lien or other interest in Collateral
that secures payment of a Liability or performance of an obligation.
2. SECURITY INTEREST
(a) As security for the payment in full of principal, interest and
performance of the Note and all other Liabilities of Debtor to the Creditor,
Debtor hereby grants to the Creditor a Security Interest in the Collateral and
all Proceeds arising therefrom and any and all products of the Collateral.
(b) Debtor represents that it is the sole lawful owner of the
Collateral attributable to it, free and clear of any liens and encumbrances that
have not been previously disclosed in writing to the Creditor, and has the right
and power to pledge, sell, assign and transfer absolute title thereto to
Creditor and that no financing statement covering the Collateral, other than the
Creditor's, has been filed with respect to any Collateral.
(c) Debtor agrees that the Security Interest shall be a first
priority security interest in the Collateral, senior and prior in payment to all
other indebtedness and obligations of Debtor to third parties.
3. USE OF COLLATERAL
Until the occurrence of an Event of Default (as defined below), Debtor
may use the Collateral in any lawful manner.
4. INSURANCE
Omitted.
5. DEFAULT
Each of the following shall constitute an Event of Default hereunder:
(a) any Event of Default (as defined in the Note) not cured
by the end of any applicable cure period;
(b) if the Debtor shall or shall attempt to (i) sell,
encumber or otherwise dispose of the Collateral or any
interest therein, (ii) conceal, hire out or let the
Collateral, (iii) misuse or abuse the Collateral, or
(iv) use or allow the use of the Collateral in
connection with any undertaking prohibited by law;
2
(c) if the Collateral shall be attached, levied upon, seized
in any legal proceedings, or held by virtue of any lien
or distress;
(d) if the Debtor shall fail to pay promptly all taxes and
assessments upon the Collateral or the use thereof,
except such taxes the amount, applicability or validity
of which are being contested in good faith by
appropriate proceedings and with respect to which the
Debtor shall have set aside on its books adequate
reserves with respect to such taxes as are required by
generally accepted accounting principles as in effect;
(e) if the Debtor shall breach any of the covenants,
agreements or representations contained herein or in the
Note; or
(f) if there shall occur any loss, theft, damage or
destruction of any material item or part of the
Collateral for which, in the opinion of the Creditor,
there is insufficient insurance coverage.
Upon the occurrence of any one or more of the foregoing Events of
Default, in addition to any rights that may exist under and pursuant to the
Note, (1) all Liabilities shall become immediately due and payable, and (2) the
Debtor agrees upon demand of the Creditor to deliver the Collateral to or for
the benefit of the Creditor, or Creditor may, with or without legal process, and
with or without previous notice or demand for performance, enter any premises
where the Collateral may be, and take possession of the same, together with
anything therein; and the Creditor may make disposition of the Collateral
subject to any and all applicable provisions of law. If the Collateral is sold
at public sale, the Creditor may purchase the Collateral at such sale. The
Creditor, provided a statutory notice of default has been sent, may retain from
the proceeds of such sale all reasonable costs incurred in said taking and sale
and also, all sums then owing by the Debtor, and any amounts in excess of such
sums resulting from any such sale shall be paid to the Debtor.
6. GENERAL AGREEMENTS.
(a) Debtor agrees to allow the Creditor, at all reasonable times, to
examine or inspect any of the Collateral and to examine, inspect and make
extracts from the books and records of Debtor relating to the Collateral.
(b) Debtor promptly will pay when due all taxes and assessments upon
the Collateral or for its use or operation or upon the Proceeds thereof or upon
this Agreement or upon any instrument or instruments evidencing the Liabilities,
except such taxes the amount, applicability or validity of which are being
contested in good faith by appropriate proceedings and with respect to which the
Debtor shall have set aside on its books adequate reserves with respect to such
taxes as are required by GAAP.
(c) At its option, the Creditor may discharge taxes, liens or
Security Interests or other encumbrances at any time levied or placed on the
Collateral, and obtain insurance and pay for the maintenance and preservation of
3
the Collateral, and the Debtor agrees to reimburse the Creditor on demand for
any payment made or any expense incurred by the Creditor pursuant to the
foregoing authorization, including counsel fees and disbursements incurred or
expended by the Creditor in connection with this Agreement.
(d) Debtor hereby authorizes the Creditor to file financing
statements under the Uniform Commercial Code and any amendments thereto or
extensions thereof without the signature of Debtor. Such authorization is
limited to the Security Interest granted by this Agreement.
(e) The Creditor shall not be deemed to have waived any of its rights
hereunder or under any other agreement, instrument or paper signed by Debtor
unless such waiver is in writing and signed by the Creditor. No delay or
omission on the part of the Creditor in exercising any right shall operate as a
waiver thereof or of any other right. A waiver upon any one occasion shall not
be construed as a bar or a waiver of any right or remedy on any future occasion.
All of the rights and remedies of the Creditor, whether evidenced hereby or by
the Note or other instrument or paper, shall be cumulative and may be exercised
singly or concurrently.
7. EXECUTION BY CREDITOR.
This Agreement shall take effect immediately upon execution by Debtor,
and the execution hereof by the Creditor shall not be required as a condition to
the effectiveness of this Agreement. The provision for execution of this
Agreement by the Creditor is only for purposes of filing this Agreement as a
Security Agreement under the Uniform Commercial Code, if execution hereof by the
Creditor is required for such purposes.
8. CONTINUING SECURITY INTEREST; ASSIGNMENT.
This Security Agreement shall create a continuing security interest in
the Collateral and shall remain in full force and effect until the payment in
full of the Liabilities and such time as the Note shall not remain outstanding.
If at any time or times, by sale, assignment, negotiation, pledge or otherwise,
the Creditor shall transfer any Liability or Liabilities, which the Creditor
shall at all times be free to do, such transfer shall carry with it Creditor's
rights, powers and remedies under this Agreement with respect to the Liability
transferred, and the transferee shall become vested with such rights and
remedies whether or not they are specifically referred to in the transfer,
unless, and then only to the extent, that the terms of such transfer otherwise
provide. If and to the extent the Creditor retains any other Liability or
Liabilities, the Creditor shall continue to have the rights, powers and remedies
herein set forth with respect thereto.
4
9. MISCELLANEOUS.
This Agreement shall be binding upon Debtor, its successors and assigns,
and shall inure to the benefit of the Creditor and its heirs, executors,
beneficiaries, successors and assigns. Debtor shall not assign this Agreement
except with the express written consent of the Creditor. No amendment or waiver
of any provision of this Agreement, nor consent to any departure by Debtor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Creditor, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. If
one or more provisions of this Agreement are held to be prohibited, invalid or
unenforceable under applicable law, such provision will be effective to the
fullest extent possible excluding the terms affected by such prohibition,
invalidity or unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. If the prohibition,
invalidity or unenforceability referred to in the prior sentence requires such
provision to be excluded from this Agreement in its entirety, the balance of
this Agreement will be interpreted as if such provision were so excluded and
will be enforceable in accordance with its terms. This Agreement and the rights
and obligations of the Creditor and Debtor hereunder shall be governed by and
construed in accordance with the substantive laws of the State of New York,
except only to the extent that the validity or perfection of the Security
Interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
New York. This Agreement shall terminate at such time as the Note has been fully
paid or converted in accordance with its terms.
IN WITNESS WHEREOF, the undersigned Debtor has executed this Security
Agreement as of the date first above written.
XXXXXXX X. ORDER, M.D., P.C.
By:
-----------------------------
Name:
Title:
5
