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EXHIBIT 10.4.25
SECURITY AGREEMENT
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This agreement is made April 16, 1998, at Columbus, Ohio, between
Neoprobe Corporation, a Delaware corporation ("Debtor"), whose address is 000
Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxx 00000-0000, and Bank One, NA, a
national banking association ("Secured Party"), whose address is 000 Xxxx Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxx, Xxxx 00000-0000, who hereby agree as follows:
Section 1. Grant of Security Interest. Debtor grants to Secured Party a
security interest in all of Debtor's inventory and accounts receivable whether
now owned or hereafter acquired, and wherever located, including all payments
thereon and proceeds thereof and including all rights to payments under any
insurance or any warranty, guaranty, or indemnity payable with respect to any of
the foregoing (collectively, the "Collateral").
Section 2. Obligations Secured. This agreement is being made in
connection with the Loan Agreement dated this same date between Debtor and
Secured Party (the "Loan Agreement") and shall secure all obligations of Debtor
to Secured Party, including without limitation all obligations arising under:
(a) the $3,000,000 Variable Rate Cognovit Promissory Note dated the same date as
this agreement from Debtor to Secured Party (the "Note"); and (b) all of
Debtor's obligations under the other Loan Documents (as defined in the Loan
Agreement), whether or not any such obligations are now or hereafter evidenced
by promissory notes or other documents and irrespective of any guarantees or
other security now or hereafter given for any such obligations (collectively,
the "Obligations").
Section 3. Insurance. Debtor shall carry fire and extended coverage
insurance upon the Collateral, as applicable, covering its full replacement
value and naming Secured Party as an insured party therein and, promptly upon
request of Secured Party, shall furnish Secured Party with copies of the
insurance policies and certificates evidencing such insurance in force with
30-day noncancellation or termination provisions. If Debtor fails to provide any
such insurance or certificate or to pay any premiums on such insurance, Secured
Party may obtain and maintain such insurance and pay the premiums thereon, and
any amount paid by Secured Party shall be an additional obligation of Debtor
secured under this agreement. Secured Party is hereby appointed attorney-in-fact
to endorse any draft or check which may be payable to Debtor in order to collect
any proceeds of such insurance, which amount shall be applied by Secured Party
to any amount then owing by Debtor to Secured Party, and the balance, if any,
shall be paid to Debtor.
Section 4. Warranties. Debtor warrants that: (a) Debtor owns all
Collateral free and clear of all leases, security interests, liens,
encumbrances, charges, liabilities, or claims of any nature, except (i) claims
of RELA, Inc. (the "Manufacturer") related directly to Debtor's inventory which
was manufactured by the Manufacturer and with respect to which the Debtor has an
unsatisfied obligation of payment to the Manufacturer, and (ii) the security
interest created by this agreement; (b) no financing statements covering all or
any part of the Collateral are on file with the Secretary of State of either
Ohio or Colorado, the recorder of any county in any such state, or any other
recording office; and (c) this agreement creates a valid first-priority security
interest in the Collateral, securing the payment of the Obligations, and all
filings or other actions necessary or desirable to perfect and protect such
security interest have been duly made or taken or shall be duly made or taken
immediately upon execution of this agreement.
Section 5. Location of Office and Collateral. Debtor warrants that: (a)
Debtor's principal office and principal place of business are located at the
address specified at the beginning of this agreement (the "Office"); (b) the
Collateral is and will be kept at any or all of the addresses set forth on the
list of locations attached hereto as Exhibit A (the "Locations") and hereby
incorporated herein by reference; and (c) neither the location of Debtor's
principal office and place of business nor the location of the Collateral will
be changed without written notice to Secured Party not less than 15 days prior
to any such change.
Section 6. Use of Collateral. Except in connection with the sale of the
Finished Instrument Inventory (as defined in the Loan Agreement) by Debtor in
the ordinary course of its business, Debtor shall not sell, assign, pledge, or
otherwise transfer or encumber any Collateral and shall not change the location
of any Collateral without the prior
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written consent of Secured Party, which consent shall not be unreasonably
withheld. No Collateral shall be attached to real estate by Debtor without the
prior written consent of Secured Party.
Section 7. Financing Statements. Debtor hereby irrevocably authorizes
Secured Party or Secured Party's designees to execute on behalf of Debtor such
one or more financing statements, continuation statements, or amendments
thereto, and such other instruments or notices as Secured Party may consider
necessary or desirable to perfect, protect, or preserve the security interest
granted or purported to be granted by this agreement.
Section 8. Execution of Documents. Debtor shall execute any documents
and take any other actions requested by Secured Party from time to time to
perfect or protect the security interest granted or purported to be granted by
this agreement or to enable Secured Party to exercise or enforce its rights or
remedies under this agreement.
Section 9. Default. If Debtor fails to make any payment when due to
Secured Party under the Note, is in default under the Loan Agreement or any of
the other Loan Documents, or fails fully to perform any other of the Obligations
(any of the foregoing of which shall be deemed an "Event of Default"), then and
in such an event: (a) all amounts owing to Secured Party by Debtor under the
Note shall become immediately due and payable without notice; and (b) Secured
Party may exercise, with respect to the Collateral, all rights and remedies of a
secured party upon default under the Uniform Commercial Code as adopted and set
forth in applicable state law and all other rights and remedies under this
agreement or otherwise available to Secured Party. In any action or proceeding
to enforce its rights or remedies under this agreement, Secured Party shall be
entitled forthwith to immediate exclusive possession and control of the
Collateral and to receive directly all payments due or otherwise being made on
any of the Collateral, and, upon ex parte application by Secured Party to any
court of competent jurisdiction without notice to Debtor, shall be entitled to
an order giving such immediate exclusive possession and control to Secured Party
or, if Secured Party so elects, to an order appointing a receiver for the
Collateral and without any requirement of bond or other security and without any
showing that immediate or irreparable injury, loss, or damage will result if
such an order is not issued by that court. For purposes of this agreement,
notice to Debtor prior to the date of public sale of any Collateral or five days
prior to the date after which private sale or other disposition of any
Collateral will be made shall constitute reasonable notice of any such sale.
Section 10. Notices. All notices and other communications under this
agreement to be made to either Secured Party or Debtor shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed
electronically), or mailed by registered or certified mail (return receipt
requested) or sent by Federal Express, UPS, or other nationally recognized
overnight delivery service for overnight delivery to that party at the address
for that party (or at such other address for such party as such party shall have
specified in notice to the other party):
(a) If to Secured Party:
Bank One, NA
000 Xxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telecopy No. (000) 000-0000
With a copy to (which shall be sent by Secured Party):
Xxxxx & Xxxxxxxxx LLP
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No. (000) 000-0000
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(b) If to Debtor:
Neoprobe Corporation
000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000-0000
Attention: Xxxx Xxxxxxxxxx
Telecopy No. (000) 000-0000
Section 11. Governing Law. All questions concerning the validity or
meaning of this agreement or relating to the rights and obligations of the
parties with respect to performance under this agreement shall be construed and
resolved under the laws of Ohio.
Section 12. Severability. The intention of the parties to this
agreement is to comply fully with all laws and public policies, and this
agreement shall be construed consistently with all laws and public policies to
the extent possible. If and to the extent that any court of competent
jurisdiction determines it is impossible to construe any provision of this
agreement consistently with any law or public policy and consequently holds that
provision to be invalid, such holding shall in no way affect the validity of the
other provisions of this agreement, which shall remain in full force and effect.
Section 13. Venue. The parties to this agreement hereby designate the
Court of Common Pleas of Franklin County, Ohio, as a court of proper
jurisdiction and exclusive venue for any actions or proceedings relating to this
agreement; hereby irrevocably consent to such designation, jurisdiction, and
venue; and hereby waive any objections or defenses relating to jurisdiction or
venue with respect to any action or proceeding initiated in the Court of Common
Pleas of Franklin County, Ohio.
Section 14. Nonwaiver. No failure by either party to insist upon
compliance with any term of this agreement or to exercise any option, enforce
any right, or seek any remedy upon any default of either party shall affect or
constitute a waiver of the first party's right to insist upon such strict
compliance, exercise that option, enforce that right, or seek that remedy with
respect to that default or any prior, contemporaneous, or subsequent default;
nor shall any custom or practice of the parties at variance with any provision
of this agreement affect, or constitute a waiver of, either party's right to
demand strict compliance with the provisions of this agreement.
Section 15. No Third Party Benefit. This agreement is intended for the
exclusive benefit of the parties to this agreement and their respective
successors and assigns, and nothing contained in this agreement shall be
construed as creating any rights or benefits in or to any third party.
Section 16. Complete Agreement. This agreement (including any exhibits
and any documents incorporated into this agreement by reference) contains the
entire agreement among the parties and supersedes any prior agreements,
negotiations, representations, or discussions among them with respect to the
subject matter of this agreement. No additions or other changes to this
agreement shall be binding upon either party unless made in writing and signed
by both parties.
Section 17. Counterparts. This agreement may be executed in multiple
counterparts, and all such executed counterparts shall constitute one original
agreement, binding on all of the parties, whether or not both of the parties
have executed the same counterparts and whether or not the signature pages from
different counterparts have been combined, and the signature of any party to any
counterpart shall be deemed to be that party's signature to any other
counterpart and may be appended to any other counterpart.
Section 18. Captions. The captions of the various sections of this
agreement are not part of the context of this agreement, but are only labels to
assist in locating those sections, and shall be ignored in construing this
agreement.
Section 19. Survival. All agreements, obligations, warranties, and
representations under this agreement shall survive any modifications made by
either party to this agreement.
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Section 20. Genders and Numbers. When permitted by the context, each
pronoun used in this agreement includes the same pronoun in other genders or
numbers and each noun used in this agreement includes the same noun in other
numbers.
Section 21. Successors. This agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the respective successors and
assigns of each party to this agreement.
Section 22. Cumulative Effect. This agreement is intended as additional
security to Secured Party and does not supersede, waive, or otherwise affect any
other security interests, guarantees, or other agreements between Secured Party
and Debtor.
NEOPROBE CORPORATION BANK ONE, NA
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Vice President
Print Name: Xxxx Xxxxxxxxxx
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Its: Vice President Finance and Administration
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EXHIBIT A
List of Locations
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1. Neoprobe Corporation (Headquarters)
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxx 00000-0000
2. Warehouse owned by Longbow IV, Ltd.
0000 Xxxxx Xxxx Xxxxx, Xxxxx X
Xxxxxxx, Xxxxxxxx 00000
3. Warehouse owned by TC Longmont Warehouse Ltd.
Tamarac Plaza Two
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
