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EXHIBIT 10.23
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FIRST AMENDED AND RESTATED LICENSE AGREEMENT
Dated as of March 3, 1997
Between
ADVANCED NEUROMODULATION SYSTEMS, INC.
as Licensor and Successor by Merger and
Successor in Interest to Neuromed, Inc.
and
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION
as Licensee
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FIRST AMENDED AND RESTATED LICENSE AGREEMENT
FIRST AMENDED AND RESTATED LICENSE AGREEMENT, dated March 3, 1997, by
and between Advanced Neuromodulation Systems, Inc., a Texas corporation
("Licensor") as successor by merger and successor in interest to the assets of
Neuromed, Inc., and NationsBank of Texas, National Association, a national
banking association ("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor presently owns and will hereafter acquire right,
title, and interest (including rights and interests pursuant to licenses)
throughout the world in various Trademarks, Patents, Copyrights and Trade
Secrets (hereinafter, collectively, the "Intellectual Property");
WHEREAS, Licensee and Quest Medical, Inc., a Texas corporation
("Borrower"), have entered into the First Amended and Restated Credit Agreement
dated as of March 31, 1995 (such agreement, together with all amendments and
restatements thereof, being the "1995 Credit Agreement") pursuant to which
Neuromed, Inc. entered into a license agreement (the "Original Agreement");
WHEREAS, Borrower has entered into the Second Amended and Restated
Credit Agreement dated as of February 9, 1996 (such agreement, together with
all amendments and restatements thereof, the "Existing Credit Agreement") which
restates in its entirety the 1995 Credit Agreement.
WHEREAS, in October 1996, Neuromed, Inc. merged into Licensor, and
Licensor assumed all obligations of Neuromed, Inc., including but not limited
to the obligations under the Original Agreement, and Licensor succeeded to all
the assets, including, but not limited to the intellectual property assets of
Neuromed, Inc.
WHEREAS, Licensee and Borrower have entered into the Third Amended and
Restated Credit Agreement dated as of March 3, 1997 (such agreement, together
with all amendments and restatements thereof, the "Credit Agreement") which
restates in its entirety the Existing Credit Agreement.
WHEREAS, Licensor is a wholly-owned subsidiary of Borrower;
WHEREAS, as security for the payment and performance of the Obligations
which are owed by Licensor and each other Obligor to Licensee pursuant to the
Loan Papers, Licensor has agreed to grant or cause to be granted to Licensee,
security interests in, and pledges and assignments of, all assets of Licensor,
including all cash, Inventory, Receivables, Equipment, Permits and the
Intellectual Property, a license to use the Intellectual Property and Permits
and certain other collateral, to secure the Obligations;
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WHEREAS, Licensee desires a license to use the Intellectual Property and
Permits in all countries of the world solely if an Event of Default exists to
enable Licensee to exercise its rights and remedies with respect to the
Collateral under the Security Agreement;
WHEREAS, Licensor desires to grant Licensee the foregoing license to so
use the Intellectual Property and Permits; and
WHEREAS, the parties acknowledge the excellent reputation for quality of
products sold under the Intellectual Property and Permits, and desire to
safeguard, promote and enhance that reputation by ensuring the future quality
of materials, workmanship, and performance of the Inventory with respect to
which Licensee has been granted a security interest, pledge and assignment and
may exercise its rights and remedies under the Security Agreement and
Intellectual Property Agreement, if an Event of Default exists.
AGREEMENT.
NOW, THEREFORE, in consideration of the above premises and of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.1 "Collateral" has the same definition provided in the Security
Agreement.
1.2 "Effective Date" means March 3, 1997.
1.3 "Equipment" has the same definition provided in the Security
Agreement.
1.4 "Intellectual Property Agreement" means the Amended and Restated
Intellectual Property Security Agreement and Assignment dated
March 3, 1997 between Licensor and Licensee.
1.5 "Inventory" has the same definition provided in the Security
Agreement.
1.6 "Permits" means all licenses, permits and other similar rights
now or hereafter owned by Licensor (including but not limited to
all licenses, permits and similar rights issued by the FDA) and
necessary to the operation of its business, including but not
limited to all licenses, permits and other rights listed on
Schedule 2.
1.7 "Receivables" has the same definition provided in the Security
Agreement.
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1.8 "Security Agreement" means the Amended and Restated Security
Agreement dated March 3, 1997 between Licensor and Licensee.
1.9 Unless otherwise defined in this Agreement, all capitalized terms
herein shall have the same definition provided in the Credit
Agreement, the Intellectual Property Agreement and the Security
Agreement.
ARTICLE II. GRANTS TO LICENSEE AND RELATED MATTERS
2.1 Licensor hereby grants to Licensee an irrevocable, non-exclusive
royalty-free right and license to use the Intellectual Property and Permits
worldwide including, without limitation, the Intellectual Property identified
in Schedule 1 and Permits identified on Schedule 2, if an Event of Default
exists, and to enable Licensee to exercise its rights and remedies under the
Security Agreement and Intellectual Property Agreement with respect to
Collateral, including, without limitation, the right to use the Intellectual
Property and Permits on or in connection with the operation and disposition of
any Collateral and the disposition, maintenance or further production,
manufacturing or processing of the Inventory, the operation and maintenance of
the Equipment and the collection of Receivables as Licensee reasonably deems
necessary or appropriate in the exercise of its rights and remedies under the
Security Agreement and Intellectual Property Agreement with respect to
Collateral.
The parties acknowledge and agree that the Intellectual Property and
Permits are the sole and exclusive property of Licensor, subject to the terms
and conditions stated in this Agreement, the Security Agreement and the
Intellectual Property Agreement. Other than in connection with any security
interest in the Intellectual Property and Permits that Licensor has granted to
Licensee pursuant to the Security Agreement and the Intellectual Property
Agreement or any rights and remedies of Licensee under the Security Agreement
or the Intellectual Property Agreement, Licensee shall not challenge Licensor's
ownership of the Intellectual Property and Permits. Licensor expressly retains
all rights to license third parties to use the Intellectual Property and
Permits for any purpose whatsoever not in violation of the Loan Papers and
which are not exclusive as to prevent Licensee from using any of the
Intellectual Property and Permits as provided in the Security Agreement and
Intellectual Property Agreement.
2.2 The license granted to Licensee hereunder shall include the right
of Licensee to grant sublicenses to others to use the Intellectual Property and
Permits if an Event of Default exists, and to enable such sublicensees to
exercise any rights and remedies of Licensee under the Security Agreement and
the Intellectual Property Agreement with respect to Collateral, including,
without limitation, the right to grant sublicenses to others to use the
Intellectual Property and Permits on or in connection with the operation and
disposition of any Collateral, the disposition, maintenance or further
production, manufacturing or processing of Inventory, the operation and
maintenance of the Equipment and the collection of Receivables as Licensee
reasonably deems necessary or appropriate in the exercise of the rights and
remedies of Licensee
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under the Security Agreement and the Intellectual Property Agreement. In any
country where sublicenses are incapable of registration or where registration
of a sublicense will not satisfactorily protect the rights of Licensor and
Licensee, Licensee shall also have the right to designate other parties as
direct licensees of Licensor to use the Intellectual Property and Permits if an
Event of Default exists and to enable such direct licensees to exercise any
rights and remedies of Licensee under the Security Agreement and the
Intellectual Property Agreement including, without limitation, the right to use
the Intellectual Property and Permits on or in connection with the operation
and disposition of any Collateral, the disposition, maintenance or further
production, manufacturing or processing of Inventory, the operation and
maintenance of the Equipment and the collection of Receivables as such
licensees reasonably deem necessary or appropriate and Licensor agrees to enter
into direct written licenses with the parties as designated on the same terms
as would be applicable to a sublicense, and any such direct license may,
depending on the relevant local requirements, be either (a) in lieu of a
sublicense or (b) supplemental to a sublicense. In either case, the parties
hereto shall cooperate to determine what shall be necessary or appropriate in
the circumstances. For each sublicense to a sublicensee and direct license to
a licensee, Licensor appoints Licensee its agent for the purpose of exercising
quality control over the sublicensee. Licensor shall execute this Agreement in
any form, content and language suitable for recordation, notice and/or
registration in all available and appropriate agencies of foreign countries as
Licensee may require.
2.3 In connection with the assignment or other transfer (in whole or
in part) of its obligations under the Security Agreement and the Intellectual
Property Agreement to any other Person, Licensee may assign the license granted
herein without Licensor's consent and upon such assignment or transfer such
other Person shall thereupon become vested with all rights and benefits in
respect thereof granted to Licensee under this Agreement.
2.4 The parties hereto shall take reasonable action to preserve the
confidentiality of the Intellectual Property and Permits which is not otherwise
public information; provided, that Licensee shall not have any liability to any
Person for any disclosure of the Intellectual Property or Permits upon and
after any realization upon Collateral under the Security Agreement or the
Intellectual Property Agreement or otherwise as part of Licensee's enforcement
of remedies under the Loan Papers.
ARTICLE III. QUALITY CONTROL
3.1 Licensor shall refrain from using the Intellectual Property and
Permits in a form and manner or for a subject matter as to (a) reduce the value
of the Intellectual Property or Permits or (b) cause injury to Licensor's
business, reputation or goodwill.
3.2 If an Event of Default exists and Licensee exercises its rights
or remedies under the license granted herein:
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(a) Licensee may use the Trademarks licensed hereby in such form and
manner as previously used by Licensor, and shall need not notify Licensor of
any change in the form or substance of the display of a Trademark licensed
hereby. Licensee shall take reasonable action to apply trademark notice or
other marking as may be required under applicable Law of each territory and
country where each Trademark is used, or as otherwise appropriate, in
connection with use of each of the Trademarks licensed hereunder. Licensee
shall have the right to register any and all Trademarks in any and all
countries on and after the Effective Date.
(b) Licensee may dispose of any Inventory and any other manufactured
products under any of the Intellectual Property or Permits licensed hereby,
provided the Inventory and any other manufactured products so disposed of by it
or any other Person acting on behalf of Licensee shall comply in any material
respect with (i) quality standards and specifications, including labelling
specifications, employed by Licensor in commerce prior to the Effective Date,
or, where no such standards and specifications exist, a level of quality
comparable to the quality standards generally accepted for other leading
competitive brands of the same item of Inventory in the same markets from time
to time; or (ii) a level of quality comparable to that which may be adopted by
Licensor for its or its other licensees' products. Licensee shall maintain
quality control commensurate with the quality standards of Licensor at the
Effective Date or, if quality control improves after the Effective Date,
commensurate with such improved quality standards.
ARTICLE IV. TERM AND TERMINATION
4.1 This Agreement is effective as of the Effective Date and, unless
sooner terminated under the provisions set forth in this Article IV, is
perpetual and irrevocable.
4.2 The license granted in Article II with respect to any
Intellectual Property and Permits may be terminated only upon the event that
the Obligations which are owed by Licensor and each other Obligor to Licensee,
and which are secured in part by the Collateral of Licensor under the Security
Agreement and the Intellectual Property Agreement and by the license granted
herein, are finally and fully satisfied and paid in accordance with all terms
and conditions of the Loan Papers at the time of such termination. If after
termination of this Agreement, there occurs a rescission of payment of any of
the Obligations or the restoration of such payments by Licensee or any other
Person upon the insolvency, bankruptcy or reorganization of Licensor or any
other Person, this Agreement shall be reinstated as though such payment had not
been made and remain in full force and effect in accordance with the terms of
the preceding sentence.
4.3 Upon termination of this Agreement, Licensee shall, and shall
cause any sublicensee, to cease all use of any and all of the Intellectual
Property and Permits and not thereafter use any of them in any other manner
whatsoever, subject to reinstatement under Section 4.2.
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4.4 Upon termination (or reinstatement) of this Agreement, the
parties shall perform all other acts which may be necessary or useful to render
effective the termination (or reinstatement) of the interest of Licensee in the
Intellectual Property and Permits, including but not limited to the
cancellation of any registration or recordation (or the reinstatement by
registration or recordation) of this Agreement, or any summary thereof.
ARTICLE V. RECORDATION OF AGREEMENT
5.1 The parties shall cooperate to determine what may or shall be
required to satisfy the laws or regulations throughout the world with respect
to the recordation and validation of this Agreement, or otherwise to render
this Agreement and the Intellectual Property and Permits effective, and shall
execute all documents which may be necessary or desirable to implement this
Section 5.1, including registered user statements or other documents suitable
for filing with the appropriate government authorities of any country.
ARTICLE VI. REPRESENTATION AND WARRANTIES
6.1 Licensor represents and warrants that it is the owner of the
Intellectual Property identified in Schedule 1 and Permits identified on
Schedule 2 and has the right to grant the rights and license granted herein.
ARTICLE VII. PRODUCT LIABILITY INSURANCE
7.1 Licensor shall maintain product liability insurance covering
liabilities for its activities pursuant to this Agreement, of at least such
amounts as is required by the Loan Papers.
ARTICLE VIII. MISCELLANEOUS
8.1 Failure of either party to insist upon strict performance of the
terms, conditions, and provisions of this Agreement shall not be deemed a
waiver of such terms, conditions or provisions or a waiver of future compliance
therewith. No waiver of any terms, conditions, or provisions hereof shall be
deemed to have been made unless expressed in writing and signed by the waiving
party.
8.2 Any sale, transfer or other disposition of ownership of any
Intellectual Property or Permits by Licensor shall be subject to this Agreement
and the Intellectual Property Agreement and any purchaser or transferee shall
specifically state in writing that it is assuming this Agreement and that it
will be bound by all of the terms and conditions of this Agreement and the
Intellectual Property Agreement (this sentence is not a consent by Licensee to
any sale,
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transfer or other disposition (other than the grant of a license permitted
pursuant to Section 2.1) of any interest in Intellectual Property or Permits).
After giving effect to such sale, transfer or other disposition, this Agreement
and the Intellectual Property Agreement shall be valid, binding, and
enforceable in accordance with its terms against such purchaser or transferee.
A sale, transfer or other disposition of any shares of the capital stock of
Licensor shall not be deemed to be a sale, transfer or other disposition of
ownership of any Intellectual Property or Permits.
8.3 Except as otherwise may be expressly provided in this Agreement
or any other Loan Paper, Licensee shall not be construed to be and shall not
represent itself as an agent of Licensor.
8.4 (a) All notices, communications and materials to be given or
delivered pursuant to this Agreement shall, except in those cases where giving
notice by telephone is expressly permitted, be given or delivered in writing.
All written notices, communications and materials shall be sent by registered
or certified mail, postage prepaid, return receipt requested, by telecopier, or
delivered by hand. In the event of a discrepancy between any telephonic notice
and any written confirmation thereof, such written confirmation shall be deemed
the effective notice except to the extent Licensor or Licensee has acted in
reliance on such telephonic notice.
(b) All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
To Licensor: Advanced Neuromodulation Systems, Inc.
c/o Quest Medical, Inc.
One Allentown Parkway
Allen, Texas 75002
U.S.A.
Attention: F. Robert Merrill III
To Licensee: NationsBank of Texas, National Association
NationsBank Plaza
901 Main Street, 7th Floor
Dallas, Texas 75202
U.S.A.
Attention: Commercial Banking
8.5 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Texas, U.S.A.
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8.6 (a) Licensor hereby irrevocably submits to the non-exclusive
jurisdiction of any United States Federal or Texas State court sitting in
Dallas County, Texas, U.S.A. in any action or proceeding arising out of or
relating to this Agreement, and Licensor hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard or determined in
any such court and hereby irrevocably waives any objection it may now or
hereafter have as to the venue of any such suit, action or proceeding brought
in such court or that such court is an inconvenient forum.
(b) Nothing in this Section 8.6 shall limit the right of
Licensee to bring any action or proceeding against Licensor or its property in
the courts of any other jurisdiction or any party's rights under Section 8.10
of the Credit Agreement.
(c) Any judicial proceeding by Licensor against Licensee
involving, directly or indirectly, any matter in any way arising out of,
related to, or connected with this Agreement shall be brought only in a court
in Dallas County, Texas, U.S.A.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the date written
above.
ADVANCED NEUROMODULATION SYSTEMS,
INC., as successor by merger and
successor in interest to the assets
of Neuromed, Inc.
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Witness
By: /s/ F. ROBERT MERRILL III
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F. Robert Merrill III, Vice
President
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Witness
NATIONSBANK OF TEXAS, NATIONAL
ASSOCIATION
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Witness
By: /s/ BRIAN K. SCHNEIDER
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Brian K. Schneider, Vice
President
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Witness
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