EXHIBIT 10.3
COLLATERAL ASSIGNMENT OF
PARTNERSHIP INTERESTS AND
LIMITED LIABILITY COMPANY INTERESTS
This COLLATERAL ASSIGNMENT OF PARTNERSHIP INTERESTS AND LIMITED
LIABILITY COMPANY INTERESTS (this "ASSIGNMENT") is made and entered into to be
effective as of the 15th day of July, 2002 (the "EFFECTIVE DATE"), by and
between U.S. Medical Development, Inc. a Nevada corporation (the "ASSIGNOR"),
and Endocare, Inc., a Delaware corporation (the "ASSIGNEE").
RECITALS:
WHEREAS, Assignor is the record and beneficial owner of general
partnership interests, limited partnership interests, limited liability
partnership interests and limited liability company membership interests set
forth on Exhibit A hereto and incorporated in whole by this reference
(collectively the "INTERESTS") in all of the entities which own medical devices
which provide cryosurgical therapy for prostate cancer and microwave therapy for
benign prostate hyperplasia in which Assignor has an ownership interest; and
WHEREAS, Assignee has loaned Assignor $6,800,000 in order to purchase
the a general and limited partnership interest in U.S. Lithotripsy, L.P.
pursuant to the terms of that certain Partnership Interest Purchase Agreement
dated June 28, 2002, by and among Assignor, HealthTronics Surgical Services,
Inc. and Litho Management, Inc. (the "Purchase Agreement").
WHEREAS, the obligation of Assignor to Assignee is evidenced by that
certain non-recourse Promissory Note dated July 15, 2002 payable to the order of
Assignee in the principal amount of $6,800,000 (the "NOTE").
WHEREAS, the Assignor has pledged all of its right, title and interest
in and to the Interests to Assignee to secure payment of all amounts due under
the Note and certain other amounts pursuant to the terms of that certain Pledge
Agreement of even date herewith by and between Assignor and Assignee (the
"Pledge Agreement").
NOW, THEREFORE, the parties to this Assignment hereby agree as follows:
1. Collateral Assignment of Interests. In consideration of the execution
and delivery by Assignee of a non-recourse promissory note in the amount of
$6,800,000 payable to Assignee, the receipt of which is hereby acknowledged,
Assignor hereby sells, transfers, assigns and conveys to Assignee as of the
Effective Date all of Assignor's right, title and interest in and to the
Interests and its capital accounts attributable to such Interests, free and
clear of all liens, encumbrances, security interests, claims or options.
Assignee hereby accepts this Interest as of the Effective Date. This Assignment
shall be held by Assignee as collateral security for Assignor's obligations
under the Note pursuant to the terms of the Pledge Agreement.
2. Future Cooperation. Assignor and Assignee mutually agree to cooperate
at all times from and after the date hereof with respect to any of the matters
described herein, and to execute any further deeds, bills of sale, assignments,
releases, assumptions, notifications, or other documents as may be reasonably
requested by the other party for the purpose of giving effect to, evidencing or
giving notice of the transaction evidenced by this Assignment and the Pledge
Agreement.
3. Indemnity. Assignor agrees to defend, indemnify and hold harmless
Assignee of and from any and all claims, liabilities and causes of action
arising out of the ownership of the Interests prior to Assignee foreclosing on
the Interest pursuant to the terms of the Pledge Agreement.
4. Fax Signatures. Any counterpart of this Assignment may be executed
via facsimile transmission.
5. Governing Law. This Assignment has been prepared, is being executed
and delivered, and is intended to be performed, in the State of California, and
the substantive laws of the State of California and the applicable federal laws
of the United States of America shall govern the validity, construction,
enforcement, and interpretation of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Assignment
effective as of the Effective Date.
ASSIGNOR:
U.S. MEDICAL DEVELOPMENT. INC.
By: /s/ Xxxx X. House
--------------------------------
Name: Xxxx X. House
Title: President
ASSIGNEE:
ENDOCARE, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
2
EXHIBIT A
INTERESTS
1. PLEDGED LLC INTERESTS. Interests in each limited liability company as
follows:
ENTITY PERCENTAGE OWNERSHIP DATE OF ISSUANCE OF INTEREST
U.S. Microwave, LLC 22.7586% January 12, 2000
2. PLEDGED PARTNERSHIP INTERESTS. Interests in each general partnership,
limited partnership, limited liability partnership or other partnership as
follows:
TYPE OF
PARTNERSHIP INTEREST PERCENTAGE DATE OF ISSUANCE
ENTITY (E.G. GENERAL, LIMITED) OWNERSHIP OR FORMATION
------ ----------------------- ---------- ----------------
North Texas PVP, LLP 1% *
Atlantic Cryotherapy General 20% April 1, 2001
Atlantic Cryotherapy Limited 14.36% April 1, 2001
Central States Cryotherapy General 20% May 24, 2001
Central States Cryotherapy Limited 45% May 24, 2001
East Coast Cryotherapy General 20% September 1, 2001
East Coast Cryotherapy Limited 60% September 1, 0000
Xxxx Xxxxxxxx Cryotherapy General 20% September 1, 0000
Xxxx Xxxxxxxx Cryotherapy Limited 80% September 1, 2001
Georgia Cryotherapy General 20% June 1, 2001
Georgia Cryotherapy Limited 70% June 1, 2001
Kansas City Cryotherapy General * *
Kansas City Cryotherapy Limited * *
Mid-America Cryotherapy General 20% April 4, 2001
Mid-America Cryotherapy Limited - April 4, 2001
Rocky Mountain Cryotherapy General 20% November 1, 2001
Rocky Mountain Cryotherapy Limited 59% November 1, 2001
Xxxxx Cryotherapy General 20% February 27, 2002
Xxxxx Cryotherapy Limited 80% February 27, 2002
South Coast Cryotherapy General 20% April 17, 2002
South Coast Cryotherapy Limited 80% April 17, 2002
*To be provided as soon as possible
A-1
