Exhibit 10.3
COLLATERAL ASSIGNMENT
COLLATERAL ASSIGNMENT (this "Assignment") dated January 14, 2000 from
CLINICAL NEURO SYSTEMS HOLDINGS LLC, a Delaware limited liability company
(the "Assignor"), to CLINICAL NEURO SYSTEMS, INC., a Delaware corporation
("CNS"), and XXXXXX X. XXXXXXX ("Xxxxxxx"; together with CNS, the
"Assignee").
BACKGROUND
A. The Assignor and the Assignee are parties to an Asset Purchase
Agreement dated as of January 14, 2000 (the "Asset Purchase Agreement"),
pursuant to which the Assignor is purchasing substantially all of the assets
of CNS for $4,004,000 in cash plus a secured promissory note (the "CNS Note")
in the principal amount of $2,800,000.
B. Assignor is the holder of a subordinated promissory note payable to
Assignor by its sole member, Integra LifeSciences Corporation ("Integra"), in
the principal sum of $2,800,000 (the "Integra Note"), which represents a
contribution of capital by Integra to Assignor, its wholly owned subsidiary.
C. Assignor intends to secure its obligations under the CNS Note, in
part, by assigning the Integra Note to Assignee as collateral pursuant to
this Agreement.
D. CNS is willing to accept the CNS Note in payment of a portion of the
purchase price under the Asset Purchase Agreement only on the condition that
the Assignor executes and delivers this collateral assignment of the Integra
Note to Assignee.
E. CNS intends to liquidate and dissolve promptly after the date of this
Agreement, whereupon CNS intends to distribute the CNS Note and the Integra
Note and its rights under the Asset Purchase Agreement and this Agreement to
Xxxxxx X. Xxxxxxx as its sole stockholder, and upon such distribution, Xxxxxx
X. Xxxxxxx shall be the sole Assignee hereunder.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Assignment.
(a) As security for the repayment of the CNS Note and the performance
and satisfaction of all other obligations of the Assignor under the CNS Note,
Assignor hereby collaterally assigns, transfers and sets over to the Assignee
and grants to the Assignee a security interest in and to all of Assignor's
right, title, and interest in and to the Integra Note and all monies due and
to become due under the Integra Note, and all rights, remedies and benefits
arising thereunder, with full power and right in the Assignee's own name or
in Assignor's name
to take all such legal or other action as may be necessary to enforce the
provisions of the Integra Note;
(b) Upon the occurrence and during the continuance of an event of
default under the CNS Note, Assignor irrevocably appoints the Assignee its
attorney, with power of substitution, to xxx for, receive, collect,
compromise and adjust, and give releases for the monies due or to become due,
and authorizes and empowers the Assignee to endorse Assignor's name on, and
collect, all checks or other proceeds received by the Assignor under the
Integra Note.
2. Payments under the Note. Until the occurrence of an event of default
under the CNS Note, all payments under the Integra Note shall be made to
Assignor. Upon the occurrence and during the continuance of an event of
default under the CNS Note, at the Assignee's discretion, all payments under
the Integra Note (whether upon demand or otherwise) shall be made to the
Assignee and shall be applied by the Assignee against the sums due under the
CNS Note, and the Assignee shall be permitted to take all actions to collect
all payments under the Integra Note. In the event Integra shall make any
payments under the Integra Note to Assignor in contravention of this
Agreement, Assignor shall receive and hold such payments in trust for the
benefit of the Assignee and shall immediately pay over such payment to the
Assignee.
3. Representations and Warranties of Assignor. Assignor represents and
warrants as follows:
(a) Assignor has not previously assigned, transferred or pledged the
Integra Note and no other person or entity has any right, title or interest
thereto.
(b) The Integra Note and Integra's remaining obligations thereunder are
in full force and effect and enforceable in accordance with their terms, except
as such enforcement may be limited by bankruptcy, insolvency or other laws of
general application relating to or effecting the enforcement of creditors'
rights and except as enforcement is subject to general equitable principles.
(c) No default has occurred under the Integra Note. Integra has no
defenses, setoffs or counterclaims to payment under the Integra Note, except
as expressly set forth therein.
(d) Assignor is the lawful holder of and owner of all rights under the
Integra Note, and has the right and ability to assign the Integra Note and
has the full right and title to the Integra Note free from any lien, security
interest, encumbrance or other right whatsoever.
(e) Assignor shall perform and fulfill all obligations and conditions to
be performed and fulfilled under the Integra Note, if any, and expressly
acknowledges that no duties thereunder are being imposed upon or delegated to
the Assignee.
4. Delivery of Note. Assignor has delivered the Integra Note to the
Assignee concurrently herewith.
5. Modifications. Assignor shall not consent to any changes or
modifications to the Integra Note, nor waive, excuse, condone or in any
manner release or discharge any covenant or agreement of Integra under the
Integra Note without the Assignee's prior written consent.
6. Communications. Assignor, promptly upon its receipt thereof, shall
provide the Assignee with copies of all notices and other communications
received by Assignor from or on behalf of Integra and relating in any way to
the Integra Note.
7. Notices. Any written notices required or permitted by this Agreement
shall be effective if delivered in accordance with paragraph 8 of the CNS
Note.
8. Miscellaneous.
(a) This Assignment shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(b) This Assignment shall be binding upon Assignor, its successors and
assigns and shall inure to the benefit of the Assignee, its successors and
assigns.
(c) This Assignment contains the entire agreement of the parties with
respect to the subject matter hereof and no representation, inducement,
promise or agreement between the parties with respect to the subject matter
hereof which is not embodied herein shall be of any force or effect.
(d) This Assignment may not be modified, amended or otherwise altered,
except by written agreement executed by Assignor and Assignee.
(e) CNS and Xxxxxxx acknowledge and agree to the subordination
provisions of the Integra Note.
IN WITNESS WHEREOF, Assignor and the Assignee have executed this
Assignment as of the date written above.
Assignor:
CLINICAL NEURO SYSTEMS HOLDINGS LLC
By: Integra LifeSciences Corporation, its sole
member
By:
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Xxxxxx X. Xxxxx, Chief Executive Officer
Assignee:
CLINICAL NEURO SYSTEMS, INC.
By:
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Xxxxxx X. Xxxxxxx, President
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XXXXXX X. XXXXXXX
APPROVED AND AGREED:
INTEGRA LIFESCIENCES
CORPORATION
By:
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Xxxxxx X. Xxxxx,
Chief Executive Officer
