EXHIBIT 10.5
EXHIBIT C
PROMISSORY NOTE
In consideration of, and in connection with, the Settlement Agreement
and Mutual Release entered into as of September 30, 1998, by and among plaintiff
Exogen Inc., ("Exogen") and defendants, Xxxxx Consulting, Inc., ("Consulting")
and Xxxxxx X. Xxxxx, ("Xxxxx") Xxxxxx X. Xxxxx as Third Party Plaintiff against
the Third Party Defendants, Interpore International, ("Interpore") and Interpore
Orthopaedics ("IOI"), (the "Settlement Agreement"), the undersigned, Exogen,
whose current business address is 00 Xxxxxxxxxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxxxxxx, XX 00000, promises to pay to the order of Consulting, the principal
amount of Seventy Six Thousand Three Hundred Sixty Four Dollars and Twenty One
Cents ($76,364.21) in installments, as set forth in Schedule 1 attached hereto,
and made a part hereof. All payments shall be made to Xxxxx Consulting, Inc.,
care of 000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, or at such other address
as designated by Consulting in writing to Exogen.
UNCONDITIONAL RIGHT TO PAYMENT
The obligation of Exogen to pay each and every installment under this
Promissory Note is unconditional and irrevocable and the right of Consulting to
receive each and every payment hereunder is uncontestable.
Exogen shall not have any right of offset with respect to any payments
due hereunder and Exogen hereby waives any defenses or counterclaims which would
result in a right of offset.
EVENTS OF DEFAULT
The occurrence of any of the following events shall be considered a
default in the obligations under this Promissory Note ("Events of Default"):
(a) Failure to timely pay any installment set forth on Schedule 1
annexed hereto. Subject to paragraph 5 of the Settlement
Agreement, a payment shall be timely if received by Consulting
on or before the due date set forth in Schedule 1; or
(b) Failure by Exogen to observe or perform any of the covenants
or agreements in the Settlement Agreement; or
(c) A decree or order by a court adjudging Exogen bankrupt or
insolvent, or approving, as properly filed, a petition seeking
reorganization of Exogen's affairs under the federal
bankruptcy code or any other similar federal, state or foreign
law, which is not dismissed within 60 days of filing; or
(d) A decree or order of a court for the appointment of a receiver
or trustee or assignee in bankruptcy or insolvency for Exogen,
or for the winding-up or liquidation of the affairs of Exogen;
or
(e) Exogen institutes proceedings to be adjudicated a voluntary
bankrupt or consents to the institution of a bankruptcy
proceedings or files a petition or answer or consent seeking
reorganization or rearrangement with creditors under any
federal or a state or foreign bankruptcy act or any other
similar federal or state law or
(f) Exogen makes an assignment for the benefit of creditors or
admits in writing an inability to pay debts generally as they
become due; or
(g) The agreement by Exogen to any merger, buy-out, acquisition,
asset sale transaction or other corporate event resulting in a
change of control which is not conditioned upon the acquiring
entity assuming Exogen's obligations under this Promissory
Note.
Upon the occurrence of any of the above events of default, and upon ten
(10) days written notice to Exogen in accordance with paragraph 5 of the
Settlement Agreement, all payments set forth on Schedule 1, which have not yet
been made, shall become immediately due and payable without presentment, demand
or notice of any kind, all of which are hereby expressly waived, anything in
this Promissory Note to the contrary notwithstanding. Upon the expiration of the
ten (10) day notice period, Consulting shall have the right to institute an
action against Exogen for all payments set forth on Schedule 1, which have not
yet been made, with interest thereon at the rate of 9% per annum from the date
of commencement of the action. Exogen shall be liable for and pay any and all
attorneys' fees incurred by Consulting in such an action.
PREPAYMENTS
Exogen shall have the right to pre-pay the unpaid balance of this
Promissory Note without penalty upon 10 days written notice to Consulting.
MERGER OR CONSOLIDATION
The obligations of Exogen hereunder shall extend to, and be binding
upon, each of its successors, assigns, any corporation of which it owns more
than 50% of the voting stock, and the transferee of all, or substantially all,
of Exogen's assets.
Dated: September 30, 1998
EXOGEN, INC.
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Chief Financial Officer
