Exhibit 10.37
LICENSE
AGREEMENT
THIS LICENSE AGREEMENT (this “
Agreement ”), dated as of December 31, 2008 (the
“ Effective Date ”), is entered into by and
between Hyatt Corporation, a Delaware corporation (“
Licensor ”), and CC-Development Group, Inc., a
Delaware corporation (“ Licensee ”). Each of
Licensor and Licensee are sometimes referred to herein,
individually, as a “ Party ” and, collectively
as the “ Parties .”
RECITALS
WHEREAS, pursuant to a Purchase
Agreement dated as of December 31, 2008 (the “
Purchase Agreement ”), among Classic Residence
Management Limited Partnership (“ CRM LP ”), H
Mark, L.L.C. (“ H Mark ”) and IHE, INC. (“
IHE ”) (collectively, the “ Buyers
”), CRM LP (i) assigned to the Buyers all of its right,
title and interest in and to the trademark and service mark CLASSIC
RESIDENCE BY HYATT, including any portrayal, logo, representation
or depiction thereof, the registrations thereof with the United
States Patent and Trademark Office (U.S. Reg. Nos.
1,536,978 & 2,934,976), and all common law rights with
respect thereto, the goodwill associated therewith and all rights
to sue and recover for past, present and future infringement
thereof (collectively referred to herein as the “ CRbH
Mark ”) and (ii) agreed to cease and desist use of
the domain name “classichyatt.com”,
“classichyatt.org”, “hyattclassic.com” and
“hyattclassic.org” (the “ Domain
Names” ), other than pursuant to this Agreement, which
Domain Names are currently registered to Classic Residence by
Hyatt, a d/b/a used by CRM LP;
WHEREAS, (i) members of H Mark
and (ii) IHE and its subsidiaries are holders of at least 90%
of the issued and outstanding common stock of Global Hyatt
Corporation, a Delaware corporation (“ GHC
”);
WHEREAS, immediately following the
closing of the transactions contemplated by the Purchase Agreement,
(i) the members of H Mark contributed their interests in H
Mark to GHC, (ii) IHE contributed its ownership interest in
the CRbH Mark to GHC, and (iii) GHC contributed all of its
right, title and interest in and to the interests in H Mark and the
CRbH Mark to Licensor, a wholly owned subsidiary of GHC;
WHEREAS, Licensor is now the owner
of all right, title and interest in and to the CRbH
Mark;
WHEREAS, prior to the closing of the
transactions contemplated by the Purchase Agreement, Licensee and
its Subsidiaries (the “ Classic Companies ”)
rendered services to the general public using the CRbH
Mark;
WHEREAS, pursuant to the Purchase
Agreement, the Buyers agreed that they would or would cause the
applicable direct or indirect assignee of Buyers’ right,
title and interest in and to the CRbH Mark to grant a limited
license to Licensee to permit the Classic Companies to continue use
of the CRbH Mark and the Domain Names (i) for a transition
period during which the Classic Companies, subject to the continued
use described in clauses (i) and (ii) below, either
(A) will re-brand the Business (as defined
below) and cease their use of the CRbH Mark and
the Domain Names or (B) cease the use of the CRbH Mark and the
Domain Names upon the occurrence of a Change of Control (as defined
below), (ii) to the extent necessary to permit the Classic
Companies to comply with pre-existing contractual obligations to
third parties and (iii) as required by applicable laws,
regulations or governmental authorities; and
WHEREAS, Licensor is willing to
provide a limited license to Classic subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of
the foregoing premises and the mutual covenants and agreements made
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I.
DEFINITIONS
In addition to the other terms
defined elsewhere in this Agreement, the following terms shall have
the following meanings when used in this Agreement:
1.1 “ Business ”
means the business of the Classic Companies conducted as of
Effective Date, and as may thereafter be conducted of
(i) providing Congregate Residential Services and
(ii) leasing, managing, marketing, operating and owning
Congregate Residential Facilities.
1.2 “ Change of Control
” means the occurrence of any of the following
events:
(i) any person or persons acting
together which would constitute a “group” for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”), other than any
holders of the securities of Licensee (and their Affiliates)
immediately prior to the relevant measurement date, acquires or
beneficially owns, directly or indirectly, securities representing
more than fifty percent (50%) of the total combined voting
power of Licensee. The term “ Affiliate ” means
any partnership, corporation, firm, joint venture, association,
trust, unincorporated organization or other entity that, directly
or indirectly, through one or more intermediaries, is controlled by
trustees of the trusts (in their capacity as trustees) which own at
least a majority of securities of Licensee as of January 1,
2009;
(ii) the consummation of a merger or
consolidation of Licensee (a) in which Licensee is not the
continuing or surviving entity (other than a consolidation or
merger with a wholly-owned subsidiary of Licensee or an Affiliate
in which all outstanding shares of common stock of Licensee (the
“ Common Stock ”) immediately prior to the
effectiveness thereof are changed into or exchanged for all or
substantially all of the common stock of the surviving entity) or
(2) pursuant to which, even though Licensee is the continuing
or surviving entity, the outstanding shares of Common Stock are
converted into cash, securities or other property; or
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(iii) the consummation of the sale
or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of
Licensee.
1.3 “ Congregate
Residential Facilities ” means assisted living,
independent living, retirement and nursing residential, or any
combination of the foregoing, facilities and related improvements,
fixtures, furnishings and equipment, which facilities are leased,
managed, marketed, operated or owned by any one of the Classic
Companies and are primarily intended for the use and occupancy by
individuals who are 62 years of age or older, whether such
facilities are rental, life care, condominium, or other form of
senior living communities.
1.4 “ Congregate
Residential Services ” means services to residents of
Congregate Residential Facilities now or hereafter provided by any
of the Classic Companies.
1.5 “ Controlling
”, “ controlled ”, “ controlled
by ”, “ control ” and “ under
common control with ” mean the ability, by ownership of
voting securities or otherwise, directly or indirectly, through one
or more intermediaries, to direct the managerial and operating
policies of any Person.
1.6 “ First Class
Standard ” means (i) with respect to the Congregate
Residential Facilities, a standard of quality of maintenance,
construction, furnishing, finishing and equipping substantially
commensurate with or better than the standard as of the Effective
Date found in the Congregate Residential Facilities operated by any
of the Classic Companies and offering to the residents thereof
services comparable to the Congregate Residential Services and
(ii) with respect to Congregate Residential Services and other
operations of the Congregate Residential Facilities, a standard of
quality commensurate with or better than the standard of operation
and services as of the Effective Date found in the Congregate
Residential Facilities operated by any of the Classic Companies,
subject in the case of clauses (i) and (ii), during the
Transition Period, to reasonable adjustments, approved as a policy
matter by the Board of Directors of Licensee, designed to address
market and economic conditions that impact the Business.
1.7 “ Person ”
means an individual, corporation, partnership, joint venture,
limited liability company or limited liability partnership,
association, trust, estate or other fiduciary, any other legal
entity, and any government or governmental entity.
1.8 “ Subsidiary
” means (i) with respect to any Person (the “
Parent ”), any other Person which the Parent controls,
directly or indirectly, whether through the ownership of securities
or otherwise or (ii) entities in which Licensee and/or any of
the entities in clause (i) of this Section 1.8 has an
investment and which is managed by Licensee or any of the entities
in clause (i) of this Section 1.8 using the CRbH Mark
licensed under Section 2.1 hereof.
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1.9 “ Term ” has
the meaning set forth in Section 5.1 hereof.
1.10 “ Territory
” means within the United States.
1.11 “ United States
” means the United States of America, its territories and
possessions.
ARTICLE II.
LICENSE
GRANT
2.1 License Grant for CRbH
Mark .
(a) Subject to the terms of this
Agreement, Licensor hereby grants to Licensee a limited,
non-exclusive right during the Term to use, or permit its
Subsidiaries to use the CRbH Mark within the Territory only in
connection with the conduct of the Business, including promotions
and advertising associated with the Business and business cards,
stationery, brochures and other literature, internal and external
signage, containers, labels, packaging and materials used in
connection with the conduct of the Business; provided, however,
such use is limited to and only permitted: (i) for a
transition period beginning on the Effective Date and ending upon
the earlier to occur of (A) December 31, 2010 and
(B) the consummation of a Change of Control (the “
Transition Period ”) for the purposes described in
Section 2.3(a) below, (ii) during and after the
Transition Period, to the extent necessary to permit each of the
Classic Companies to comply with its contractual obligations to
third parties in effect on the Effective Date and (iii) during
and after the Transition Period, to permit each of the Classic
Companies to comply with applicable laws or regulations or with any
license or permit issued by any governmental authority in
connection with the Business (the usage described in the
immediately preceding clauses (ii) and (iii) are referred
to herein as “ Mandatory Usage ”).
(b) The limited license granted
pursuant to this Section 2.1 shall automatically terminate
with respect to any Mandatory Usage to the extent it is no longer
required to permit the Classic Companies to comply with the
conditions that give rise to such Mandatory Usage.
(c) In the event of termination of
the Transition Period due to a Change of Control, the Licensor will
use reasonable efforts to agree with Licensee on terms of limited,
continued use of the CRbH Mark for a wind down period not to exceed
30 days following the consummation of the Change of Control;
provided that no such continued use shall be permitted absent a
written agreement executed by the Parties on terms satisfactory to
Licensor in its reasonable discretion.
2.2 License Grant for Domain
Names . Subject to the terms of this Agreement, Licensor hereby
grants the Licensee an exclusive license to use the Domain Names
for the purpose of operating one or more websites in connection
with the Business; provided, however, such use is limited to and
only permitted for the Transition Period, and with the prior
written consent of Licensor (which consent shall not be
unreasonably withheld) to support Mandatory Usage of the CRbH Mark
for a period not to exceed 90 days
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following the end of the Transition Period.
Licensee shall not transfer, lease or pledge the Domain Names to
any third party, nor shall the Licensee sublicense the Domain
Names. During the Transition Period, Licensor and Licensee will use
commercially reasonable efforts to cooperate in formulating and
implementing a plan to redirect internet traffic from one or more
of the Domain Names to another domain name established by Licensee
in connection with the Business.
2.3 Obligations of Licensee to
Cease Use of the CRbH Mark and the Domain Names. Licensee shall
(a) cause the Classic Companies to cease their individual and
collective use of the CRbH Mark and the Domain Names and re-brand
the Business by the end of the Transition Period, subject, in the
case of the CRbH Mark to Mandatory Usage and (b) with respect
to the CRbH Mark use commercially reasonable efforts to eliminate
all Mandatory Usage by the Classic Companies as soon as
practicable.
2.4 Rights and Obligations of
Subsidiaries . The Parties agree that the Subsidiaries shall
not receive nor be deemed to receive any direct rights under this
Agreement, but that Licensee may make such rights to use the CRbH
Mark and the Domain Names it receives under this Agreement
available to such Subsidiaries; provided, that, Licensee shall be
responsible for ensuring compliance by the Subsidiaries with the
obligations of Licensee hereunder, and Licensee shall be liable to
Licensor for any breach by any Subsidiary of such
obligations.
2.5 Reservation of Rights .
Subject to Section 6.1(b) below, Licensor expressly reserves
to itself all rights in, to and with respect to the CRbH Mark and
the Domain Names to the extent not expressly granted to Licensee
hereunder.
ARTICLE III.
USE OF THE CRbH MARK AND
DOMAIN NAMES BY LICENSEE
3.1 First Class Standard .
Licensee shall conduct the Business in a manner that is at least
commensurate with the First Class Standard. Following the
Transition Period, Licensor may, in its discretion, make reasonable
modifications to the First Class Standard; provided, that any
deviations from such First Class Standard (as so modified) as are
being practiced by Licensee as of the date of such modification,
but which were in compliance with the First Class Standard in
effect immediately prior to such modification, shall be deemed
approved.
3.2 Compliance with Trademark
Usage Guidelines . Subject to the last sentence of this
Section 3.2, Licensee’s use of the CRbH Mark will comply
at all times and in all material respects with Licensee’s
trademark usage guidelines attached hereto as Exhibit 3.2
(the “ Guidelines ”), which Guidelines are in
effect as of the Effective Date. Following the Transition Period,
Licensor reserves the right to direct Licensee to conform to such
further quality standards as may be reasonably set by Licensor and
reserves all rights of review, approval and inspection which are
necessary to achieve this result. Any deviations from the
Guidelines shall require the prior written approval of
Licensor;
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provided that such deviations as are being used
at the Congregate Residential Facilities where such use constitutes
Mandatory Usage as of the Effective Date (“ Existing
Variations ”), shall be deemed approved; provided,
further that at such time as the programs including such Existing
Variations are terminated, such approval shall also be terminated
with respect to such Existing Variation(s).
3.3 Affixation of Notice of
Trademark Protection and Acknowledgement . Licensee agrees to
use its commercially reasonable efforts to affix to any
advertising, promotional, display or other material which uses,
incorporates or displays the CRbH Mark the appropriate notice of
trademark protection as may be requested by Licensor (e.g.,
“TM”, “SM” or “
® ”) and, following the Transition Period,
an acknowledgement that the CRbH Mark is the property of Licensor;
provided that during the Transition Period, the Classic Companies
may continue to use any materials produced in the ordinary course
of business consistent with past practices prior to the Effective
Date.
3.4 Right to Receive Samples
. Upon Licensor’s reasonable request, Licensee shall, at its
expense, provide Licensor with representative samples of signage,
advertising, marketing and promotional materials and all other
written or broadcast materials distributed or being developed for
distribution in connection with the Business for Licensor’s
review of Licensee’s compliance with its obligations
hereunder.
3.5 Right of Inspection .
Upon Licensor’s request, Licensee shall permit Licensor
and/or Licensor’s representatives to enter into and inspect
during normal business hours and upon reasonable notice, any
properties affiliated with the Business for purposes of evaluating
Licensee’s compliance with this Agreement.
3.6 Further Limitations
.
(a) Licensee shall not and shall
cause each of its Subsidiaries not to (i) do or cause any act
or thing which may in any way contest or impair any part of
Licensor’s right in and to the CRbH Mark or the Domain Names;
(ii) file any applications for registration of the CRbH Mark,
any similar terms, or any terms embodying in whole or in part the
CRbH Mark, in the United States Patent and Trademark Office, any
state or foreign country; (iii) adopt or use, without
Licensor’s prior written consent, any word or mark which is
similar to or likely to be confused with the CRbH Mark (other than
use of the words “Classic” and/or
“Residence” which do not include the word
“Hyatt”) or “Hyatt”, or (iv) file any
applications for registration of the Domain Names, or any similar
domain names.
(b) Licensee shall not, and shall
not permit any of its Subsidiaries to, in any manner represent that
it has any ownership of the CRbH Mark (or any registration thereof)
or the Domain Names (or registration thereof), except to the extent
that such representations were included in print material generated
before the Effective Date.
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(c) Any and all goodwill arising
from the Classic Companies’ use of the CRbH Mark shall inure
solely to the benefit of Licensor, and neither during nor after the
termination of this Agreement and the license granted hereunder
shall any of the Classic Companies assert any claim to the CRbH
Mark or such goodwill. Licensee shall not, and shall cause each of
its Subsidiaries not to, take any action that would reasonably be
expected to be detrimental to the goodwill associated with the CRbH
Mark or with Licensor or any of Licensor’s subsidiaries;
provided that, during the Transition
Period, actions required or permitted under this
Agreement to be taken by Licensee to discharge its obligations
under this Agreement shall be deemed not to violate this
covenant.
3.7 Creation of New Marks .
Should Licensee or its Subsidiaries, contractors or vendors develop
new marks, slogans or designs which incorporate the CRbH Mark in
any manner, such new marks, slogans or designs shall be the
property of Licensor, are hereby assigned to Licensor without the
requirement of any further action, and shall be deemed included in
the license to Licensee as provided in this Agreement only with the
prior written consent of Licensor, which co
