Exhibit 10(b)
COLLATERAL ASSIGNMENT OF LIFE INSURANCE POLICY
THIS ASSIGNMENT is made effective this 25th day of November, 1998, by and
between ALLIANCE PHARMACEUTICAL CORPORATION (hereinafter "APC"), and XXXXX
XXXXXX XXXX (hereinafter referred to as the "Insured").
WITNESSETH THAT:
WHEREAS, APC and the Insured have entered into a Split Dollar Life
Insurance Agreement (hereinafter "Agreement") effective November 12, 1998; and
WHEREAS, pursuant to said Agreement, APC is entitled to receive certain
death benefit proceeds in the event of the death of the Insured and to certain
sums in the event of termination of said Agreement;
NOW, THEREFORE, in consideration of the covenants contained herein, and in
furtherance of the Agreement between the parties, it is further mutually agreed
that:
1. POLICY. General American Life Insurance Company has issued a Policy
of insurance on the life of Insured. See EXHIBIT "A" of the attached Agreement
for a description of the Policy. The ownership of said Policy has been
transferred to the Insured and beneficiaries thereof shall be as designated by
the Insured.
2. SPLIT-DOLLAR LIFE INSURANCE AGREEMENT. The Policy is subject to the
Agreement between APC and the Insured. Said Agreement, along with its Exhibit
"A" which is attached thereto, is hereby incorporated into and made a part of
this Assignment.
3. PREMIUMS. Premiums paid on the Policy shall be allocated as set forth
in the Agreement.
4. COLLATERAL ASSIGNMENT. The Insured hereby assigns, transfers, and
sets over to APC only the following specific limited rights in the Policy, and
subject to the following terms and provisions:
a. This Assignment is made, and the Policy is held simply as
collateral for the purpose of providing APC with security for the
payments to be made to APC under the terms of the Agreement.
b. APC shall have an interest in the Policy limited to that
necessary to secure the payments to be made to APC with respect to the
Policy under the terms of the Agreement.
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c. APC shall have the right to be repaid from and to the extent of
the proceeds or the cash surrender value of the Policy, as the case may be,
to the extent of its interest as set forth in the Agreement:
1) in the event of the death of the Insured;
2) in the event the Policy is lapsed, canceled or
surrendered by the Insured; or
3) in the event of the termination of the Agreement.
5. RIGHTS OF OWNERSHIP OF APC.
a. APC shall have no right to obtain from the Insurer any loans or
advances against its interest in the Policy, except as specifically
provided in the Agreement. Likewise, APC does not possess any "incidents
of ownership" in the Policy, unless specifically provided in the Agreement.
b. APC is specifically prohibited:
1) from surrendering the Policy for cancellation;
2) from designating a beneficiary or assigning its rights
to any person other than to the Insured or some other
person as the Insured may direct, or to a successor of
the business of APC; and
3) in general, from taking any action which would endanger
the interest of the Insured or endanger the payment of
the death proceeds in excess of APC's interest in the
Policy.
c. Notwithstanding any provisions of this Assignment to the
contrary, APC shall, when its interest has been satisfied, be obligated to
release this Assignment, or make a reassignment of its interest in the
Policy to the Insured or his successors or assigns.
6. RIGHTS OF OWNERSHIP OF INSURED. Except as specifically provided
herein, the Insured shall retain and possess all other incidents of ownership in
the Policy, including but not limited to:
1. the sole and exclusive right to cancel or surrender the
Policy for its cash surrender value, if any, but only after
the termination of the Agreement;
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b. the right to designate and change the beneficiary of the
death proceeds on the Policy;
3. the right to elect and exercise any optional mode of
settlement permitted by the Policy.
However, all rights retained by the Insured shall be subject to the terms and
conditions of the Agreement.
7. EXERCISE OF RIGHTS. The exercise of any right given herein to APC, or
retained by Insured, shall be solely at the option of each party respectively,
and shall not require notice or consent of one party to the other, except as
otherwise set forth in the Agreement.
8. RELEASE AND REASSIGNMENT. APC shall release and reassign all of its
specific rights in the Policy transferred by this Assignment upon payment of the
amounts required in the Agreement, without unreasonable delay.
9. INSURER NOT A PARTY TO THIS ASSIGNMENT. The Insurer is not a party to
this Collateral Assignment.
10. CONSTRUCTION. It is the expressed intention of the parties that this
Assignment be construed so that APC has absolutely no right of ownership in the
Policy, except as specifically provided in the Agreement.
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IN WITNESS WHEREOF, this assignment is hereby executed, and is effective as
of this 25th day of November, 1998.
ALLIANCE PHARMACEUTICAL
CORPORATION
By ______________________________________
Its _______________________________________
_________________________________________
Xxxxx Xxxxxx Xxxx
Attest:
___________________________
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