EXHIBIT 10.58
PATENT COLLATERAL ASSIGNMENT AGREEMENT
Seattle, Washington
THIS PATENT COLLATERAL ASSIGNMENT AGREEMENT ("Patent Assignment") is
made and entered into as of the 16th day of January, 2002 between SPACELABS
MEDICAL, INC., a Delaware corporation ("Spacelabs Delaware"), SPACELABS MEDICAL,
INC., a California corporation, SPACELABS ▇▇▇▇▇▇▇, INC., a Delaware corporation,
VITA-STAT MEDICAL SERVICES, INC., a Florida corporation, LIFECLINIC MEDICAL DATA
CORPORATION, a Washington corporation, and ▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION, a
Washington corporation (collectively, "Borrowers"), having a mailing address at
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
SPACELABS PRODUITS MEDICAUX LTEE., a Quebec company ("Guarantor"), and BANK OF
AMERICA, N.A., a national banking association ("Lender"), having a mailing
address at ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇. Borrowers and Guarantor are collectively referred to
herein as "Assignor".
BACKGROUND. Borrowers and Lender have entered into that certain Credit
Agreement dated the same date as this Patent Assignment in connection with a
credit facility in the aggregate principal amount of $20,000,000 (as amended
from time to time, the "Credit Agreement"). Pursuant to the terms of the Credit
Agreement and the other documents executed in connection therewith
(collectively, the "Loan Documents"), the Lender has agreed to make loans and
issue letters of credit on behalf of the Borrowers. Pursuant to that certain
Guaranty dated as of the date hereof as amended, restated, supplemented or
otherwise modified from time to time (the "Guaranty"), the Guarantor has agreed
to guaranty the Obligations (as defined in the Credit Agreement) of Spacelabs
▇▇▇▇▇▇▇, Inc. under the Credit Agreement and to provide to the Lender security
for the performance of its Guaranty. In order to induce the Lender to execute
and deliver the Credit Agreement and the other Loan Documents, and as security
for the performance by the Guarantor of its obligations under the Guaranty,
Assignor has agreed to assign to Lender certain patent rights. This Patent
Assignment is being executed contemporaneously with a Security Agreement
("Security Agreement") under which the Lender is granted a lien on and security
interest in all patents owned by the Assignor (the "Patents"), whereby Lender
shall have the right to foreclose on the Patents in the event of the occurrence
and continuance of an Event of Default under the Loan Documents (as defined in
the Credit Agreement).
NOW, THEREFORE, in consideration of the premises, Assignor hereby agrees
with the Lender as follows:
1. To secure the complete and timely satisfaction of all Obligations (as
defined in the Credit Agreement), Assignor hereby grants and conveys to
the Lender and collaterally assigns to Lender all of its right, title
and interest in and to the patent applications and patents listed in
Schedule A attached hereto, including without limitation all proceeds
thereof (such as, by way of example, license royalties and proceeds of
infringement suits), the right to ▇▇▇ for past, present and future
infringements, all rights corresponding thereto throughout the world and
all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof (all of the foregoing are collectively
called the "Patents").
Unless and until the Lender exercises the rights and remedies accorded
to it under the Security Agreement, and by law with respect to the
realization upon its collateral assignment of the Patents, the Lender
hereby grants to Assignor the exclusive, nontransferable, royalty-free
right and license under the Patents for Assignor's own benefit and
account, so that Assignor may use and enjoy the Patents in connection
with its business operations and exercise rights and remedies with
respect to the Patents, but with respect to all Patents being used in
Assignor's business, only in a manner consistent with the preservation
of the current substance, validity and registration and
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the collateral assignment herein granted in such Patents; provided,
however, that the foregoing shall not impose an obligation on Assignor
to continue to use any of the Patents in Assignor's business to the
extent that such Patents are not necessary in the normal conduct of its
business. Assignor agrees not to sell or assign its interest in, or
grant any sublicense under, the license granted to Assignor in this
paragraph, except that the Assignor may sublicense the Patents in the
ordinary course of the Assignor's business consistent with its past
practices, but only in a manner consistent with the preservation of the
current substance, validity and registration and the collateral
assignment herein granted in such Patents. Upon the exercise by Lender
of the rights and remedies accorded to it under the Security Agreement
and by law with respect to the realization upon its collateral
assignment of the Patents, the license granted under this paragraph to
the Assignor shall terminate.
2. In addition to the above mentioned assignment, Guarantor hereby grants
to the Lender, as security for its obligations under the Guaranty, a
first ranking movable hypothec under the Civil Code of Quebec in the
principal amount of Forty Million Canadian Dollars (CDN$40,000,000) with
interest thereon at the rate of twenty percent (20%) per annum affecting
the universality of all present and future rights, title and interest
Guarantor may hold, now or in the future, in the Patents. If, for the
purpose of obtaining a judgment in any court, it is necessary to convert
the sum due to the Lender in any currency into Canadian currency,
Guarantor and the Lender agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at
which, in accordance with normal banking procedure, such Lender could
purchase the original currency with the Canadian currency on the
business day preceding the day on which final judgment is given or if
permitted by applicable law, on the day on which the judgment is paid or
satisfied.
3. Assignor covenants and warrants that:
(a) The Patents are subsisting and have not been adjudged invalid or
unenforceable, in whole or in part;
(b) To the best of Assignor's knowledge, each of the Patents is valid
and enforceable;
(c) No claim has been made that the use of any of the Patents
violates or may violate the rights of any third person;
(d) Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the
Patents, free and clear of any liens, charges and encumbrances,
including without limitation pledges, assignments, licenses, shop
rights and covenants by Assignor not to ▇▇▇ third persons; and
(e) Assignor has the unqualified right to enter into this Patent
Assignment and perform its terms and has entered and will enter
into written agreements with all inventors of the Patents which
will enable it to comply with the covenants herein contained; and
(f) Assignor has used, and will continue to use for the duration of
this Patent Assignment, proper statutory notice in connection
with its use of the Patents.
4. Assignor agrees that, until all of the Obligations shall have been
satisfied in full, it will not enter into any agreement outside the
ordinary course of Assignor's business consistent with its past
practices which is otherwise inconsistent with Assignor's obligations
under this Patent Assignment, without the Lender's prior written
consent.
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5. If, before the Obligations shall have been satisfied in full, Assignor
shall become entitled to the benefit of any patent application or patent
for any reissue, division, continuation, renewal, extension, or
continuation-in-part of any Patent or any improvement on any Patent, the
provisions of Section 1 shall automatically apply thereto and Assignor
shall give to the Lender prompt written notice thereof.
6. Assignor authorizes the Lender to modify this Patent Assignment by
amending Schedule A to include any future patents and patent
applications which are Patents under Section 1 or Section 5 hereof.
7. If any Event of Default (as defined in the Credit Agreement) shall have
occurred and be continuing, Assignor hereby authorizes and empowers
Lender to make, constitute and appoint any officer or agent of the
Lender, as the Lender may select in its exclusive discretion, as
Assignor's true and lawful attorney-in fact, with the power to endorse
Assignor's name on all applications, documents, papers and instruments
necessary for the Lender to use the Patents, or to grant or issue any
exclusive or nonexclusive license under the Patents to any third person,
or reasonably necessary for the Lender to assign, pledge, convey or
otherwise transfer title in or dispose of the Patents to any third
person. This power of attorney shall be irrevocable for the life of this
Patent Assignment.
8. At the earlier of such time as Assignor shall completely satisfy all of
the Obligations or the Security Agreement terminates, this Patent
Assignment shall terminate and the Lender shall execute and deliver to
Assignor all deeds, assignments and other instruments as may be
necessary or proper to evidence such termination, subject to any
disposition thereof which may have been made by the Lender pursuant
hereto.
9. Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorney's fees and legal expenses incurred by
the Lender in connection with the preparation of this Patent Assignment
and all other documents relating hereto and the consummation of this
transaction, the filing or recording of any documents (including all
taxes in connection therewith) in public offices, the payment or
discharge of any taxes, counsel fees, maintenance fees, encumbrances or
otherwise protecting, maintaining or preserving the Patents, or in
defending or prosecuting any actions or proceedings arising out of or
related to the Patents, shall be borne and paid by Assignor on demand by
the Lender and until so paid shall be added to the principal amount of
the Obligations and shall bear interest at the rate effective under the
Credit Agreement.
10. Assignor shall have the duty, through counsel reasonably acceptable to
the Lender, to prosecute diligently any patent applications of the
Patents pending as of the date of this Patent Assignment or thereafter,
which Assignor reasonably determines are necessary or desirable for the
conduct of business, until the Obligations shall have been paid in full,
to make application on unpatented but patentable inventions and to
preserve and maintain all rights in patent applications and patents of
the Patents, including without limitation the payment of all reasonable
maintenance fees and to do any and all acts which in Assignor's
reasonable determination are necessary or desirable to preserve and
maintain all rights in the Patents. Any reasonable expenses incurred in
connection with the Patents shall be borne by Assignor. Except as
permitted in Section 1 hereof, Assignor shall not abandon any right to
file a patent application, or any pending patent application or Patent
without the consent of the Lender, which consent shall not be
unreasonably withheld, but in all instances Assignor shall give the
Lender not less than ten (10) days prior written notice of its intent to
abandon any Patent.
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11. Assignor shall have the right, with the consent of the Lender, which
shall not be unreasonably withheld, to bring suit to its own name, and
to join the Lender, if necessary, as a party to such suit so long as the
Lender is satisfied that such joinder will not subject it to any risk of
liability, to enforce the Patents and any licenses thereunder. Assignor
shall promptly, upon demand, reimburse and indemnify the Lender for all
damages, costs and expenses, including reasonable legal fees and costs,
incurred by the Lender pursuant to this Section 11.
12. If Assignor fails to comply with any of its obligations hereunder, the
Lender may do so in Assignor's name or in the Lender's name, but at
Assignor's expense, and Assignor hereby agrees to reimburse the Lender
in full for all reasonable expenses, including reasonable attorneys'
fees and costs, incurred by the Lender in protecting, defending and
maintaining the Patents.
13. No course of dealing between Assignor and the Lender, nor any failure to
exercise, nor any delay in exercising, on the part of the Lender, any
right, power or privilege hereunder or under the Credit Agreement or the
other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
14. All of the Lender's rights and remedies with respect to the Patents,
whether established hereby or by the Credit Agreement or the other Loan
Documents, or by any other agreements or by law, shall be cumulative and
may be exercised singularly or concurrently.
15. The provisions of this Patent Assignment are severable, and if any
clause or provision shall be held invalid and unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any clause or provision of this
Patent Assignment in any jurisdiction. This Patent Assignment is to be
read, construed and applied together with the Security Agreement, the
Credit Agreement and the other Loan Documents which, taken together, set
forth the complete understanding and agreement of the Lender and
Assignor with respect to the matters referred to herein and therein.
16. This Patent Assignment is subject to modification only by a writing
signed by the parties, except as provided in Section 6.
17. The benefits and burdens of this Patent Assignment shall inure to the
benefit of and be binding upon the respective successors and permitted
assigns of the parties.
18. WITH THE EXCEPTION OF THE MOVABLE HYPOTHEC GRANTED BY GUARANTOR PURSUANT
TO SECTION 2 HEREOF AND THE HYPOTHECARY RECOURSES ARISING THEREFROM
WHICH SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
PROVINCE OF QUEBEC, THIS PATENT COLLATERAL ASSIGNMENT AGREEMENT SHALL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT
TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF
WASHINGTON; PROVIDED THAT THE LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
SAVE AND EXCEPT FOR ANY HYPOTHECARY RECOURSE IN THE PROVINCE OF QUEBEC
AGAINST GUARANTOR WHICH SHALL BE UNDER THE JURISDICTION OF THE COURTS OF
THE PROVINCE OF QUEBEC, ANY LEGAL ACTION OR
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PROCEEDING WITH RESPECT TO THIS PATENT COLLATERAL ASSIGNMENT AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
WASHINGTON OR OF THE UNITED STATES OF AMERICA LOCATED IN KING COUNTY,
WASHINGTON, AND BY EXECUTION AND DELIVERY OF THIS PATENT COLLATERAL
ASSIGNMENT AGREEMENT, EACH OF THE ASSIGNORS AND THE LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION
OF THOSE COURTS. EACH OF THE ASSIGNORS AND THE LENDER IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH COURTS IN
RESPECT OF THIS PATENT COLLATERAL ASSIGNMENT AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE LENDER SHALL HAVE
THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE ASSIGNORS OR
THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE LENDER DEEMS
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE
IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
THE ASSIGNORS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
THEM AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE ASSIGNORS AT
THEIR ADDRESSES SET FORTH IN SECTION 12.8 OF THE CREDIT AGREEMENT AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE
SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAIL POSTAGE PREPAID.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO SERVE
LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
19. ASSIGNORS AND THE LENDER EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS PATENT COLLATERAL ASSIGNMENT AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
LENDER-RELATED PERSON OR PARTICIPANT, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE ASSIGNORS AND THE LENDER EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY OF THE CREDIT AGREEMENT, THIS PATENT COLLATERAL
ASSIGNMENT AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF
OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE CREDIT AGREEMENT, THIS
PATENT COLLATERAL ASSIGNMENT AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Patent
Assignment to be executed and delivered by its duly authorized officer as of the
date first set forth above.
BORROWERS:
SPACELABS MEDICAL, INC., VITA-STAT MEDICAL SERVICES, INC.,
a Delaware corporation a Florida corporation
By: By:
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Its: Its:
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SPACELABS MEDICAL, INC., LIFECLINIC MEDICAL DATA
a California corporation CORPORATION, a Washington
corporation
By: By:
--------------------------------- ---------------------------------
Its: Its:
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SPACELABS ▇▇▇▇▇▇▇, INC., ▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION,
a Delaware corporation a Washington corporation
By: By:
--------------------------------- ---------------------------------
Its: Its:
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GUARANTOR:
SPACELABS PRODUITS MEDICAUX
LTEE., a Quebec company
By:
---------------------------------
Its:
-----------------------------
LENDER:
BANK OF AMERICA, N.A.,
a national banking association
By:
---------------------------------
Its:
-----------------------------
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Schedule A - Page 1
