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EXHIBIT 10.34
LICENSE AGREEMENT
This LICENSE AGREEMENT ("the Agreement") is entered into as of the 16th
day of August, 1996 by and between DR. MANFRED GEORGE KRUKEMEYER ("Licensor")
and PARACELSUS HEALTHCARE CORPORATION, a California corporation ("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor is the owner of the tradename PARACELSUS (the
"Tradename") and the related trademark "PHC Paracelsus Healthcare Corporation"
and design as such trademark appears on Exhibit A hereto (the "Trademark")
(together with the Tradename, the "Licensed Marks").
WHEREAS, Licensor currently owns all of the outstanding shares of common
stock, no stated par value, of Licensee and has authorized Licensee to use the
Licensed Marks in connection with the provision of certain healthcare services
as described below.
WHEREAS, Licensee desires to confirm in writing its right to use the
Licensed Marks and Licensor, subject to certain terms and conditions, is
willing to continue to license to Licensee the right to use the Licensed Marks
in connection with healthcare services, including without limitation, the
management of hospitals, skilled nursing facilities, home health agencies and
medical office buildings, and all services incidental thereto (the "Licensed
Services") in the United States of America (the "Territory").
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. GRANT OF LICENSE
1.1. Subject to the terms and provisions hereof, Licensor hereby grants to
Licensee:
(a) a perpetual, royalty-free, exclusive (even as against Licensor) and
transferable (in accordance with the provisions of Section 6 hereof) right and
license to use and register the Tradename in the Territory as all or part of a
corporate name or "d/b/a".
(b) a perpetual, royalty-free, exclusive (even as against Licensor) and
transferable (in accordance with the provisions of Section 6 hereof) right and
license to use the Trademark in connection with the Licensed Services in the
Territory.
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2. QUALITY STANDARDS
2.1. The quality of the Licensed Services offered under the Licensed Marks
in the Territory by Licensee and all advertising and promotional material
bearing the Licensed Marks shall conform at a minimum to quality standards
heretofore established by Licensor and Licensee and existing as of the date of
this Agreement.
2.2. Upon Licensor's reasonable request from time to time but not more
than twice annually, Licensee shall permit Licensor to visit Licensee's
offices, work sites, or other places of business at reasonable times and upon
at least 5 days notice from Licensor, for inspection by Licensor of activities,
files, documents and other records relating to the Licensed Services for the
purpose of determining Licensee's compliance with the standards required by the
terms of this Agreement including without limitation with respect to the
quality of the services being offered under the Licensed Marks, in the
Territory.
2.3. Licensee may use the Licensed Marks only in the form in which they
are currently being used or as otherwise approved in writing by Licensor, such
approval not to be unreasonably withheld or delayed.
2.4. In the event that the Licensee is not in material conformance with
the quality standards set forth above, Licensor shall so inform Licensee in
writing and Licensee shall undertake to conform with such standards. If, after
a ninety (180) day period from Licensor's initial notice of material
non-conformance, the Licensee does not conform to the quality standards set
forth above, then Licensor may terminate this Agreement; provided, however,
that if the quality problem is not capable of resolution within ninety (180)
days, and if, within such period, Licensee promptly commences and diligently
pursues remedial efforts to rectify the quality problem and provides Licensor
with a reasonable written plan of and schedule for prompt rectification of the
quality problem, then Licensor shall only have the right to terminate if after
an additional ninety (180) day period, such quality defects are not remedied.
3. OWNERSHIP AND PROTECTION
3.1. Licensee acknowledges that Licensor owns the Licensed Marks in the
Territory and the goodwill associated therewith. All use of the Licensed Marks
by Licensee pursuant to this Agreement and any goodwill generated thereby,
shall inure to the benefit of Licensor and shall not vest in Licensee any title
to or right or presumptive right to continue such use.
3.2. Licensee shall not (a) challenge Licensor's title or rights in and to
the Licensed Marks in the Territory, or (b) contest the fact that Licensee's
rights under this Agreement are solely those of a licensee and shall cease upon
expiration or earlier termination of this
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Agreement. Licensee shall not file or prosecute any trademark or service mark
application or applications to register the Licensed Marks in the Territory.
3.3. Licensor shall maintain all registrations and prosecute all
applications for the Licensed Marks in the Territory, and Licensee shall pay
all fees and Licensee and Licensor shall file all documents necessary to do so.
Licensee and Licensor each shall cooperate with each other and take such action
as reasonably requested by the other to maintain or prosecute such
registrations and applications, including executing documents and providing
appropriate specimens.
4. INFRINGEMENTS
4.1. In the event Licensee becomes aware of any infringement or
unauthorized use of any of the Licensed Marks, Licensee shall promptly notify
Licensor of such infringement or unauthorized use. Licensor shall have the sole
initial right to take, and to determine whether or not to take, any action(s)
it deems appropriate in its sole discretion with respect to any unauthorized
use, infringement, or dilution of the Licensed Marks and Licensee shall
cooperate with Licensor in connection with any such actions. If Licensor
declines to take or fails to reasonably prosecute or pursue action with respect
to a particular unauthorized use, infringement or dilution, then Licensee may
undertake such action at Licensee's own expense and in Licensee's own name.
Licensor will cooperate with Licensee in any such action, including joining in
any action if necessary to maintain standing. All recovery in the form of legal
damages shall belong to the party that brought or undertook the action after
reimbursement to the other party of its respective expenses incurred in
cooperating in such claim or legal action.
5. TERMINATION
5.1. Upon termination of this Agreement, Licensee shall, as soon as
reasonably practicable: (i) change its corporate name or d/b/a as soon as
practicable to delete therefrom all references to the Tradename and (ii) cease
all use of, and destroy and/or effectively remove, the Licensed Marks and all
references thereto from all remaining advertising, promotional, display and
other materials, and shall thereafter refrain from further use of the Licensed
Marks or any further reference to the Licensed Marks directly or indirectly.
5.2. Upon the termination of this Agreement, all rights granted to
Licensee hereunder together with any interest in and to the Licensed Marks
which Licensee or its sublicensees may purport to have acquired, shall
forthwith, without further act or instrument, be assigned to and revert to
Licensor.
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6. ASSIGNMENT AND SUBLICENSING
6.1. Licensee shall have the right to sublicense or assign any of the
rights granted hereunder, or any part thereof, to any subsidiary or affiliate
of Licensee.
6.2. Licensee shall not otherwise assign any of its rights or obligations
hereunder except in connection with the sale or transfer of all or
substantially all of the business related to the Licensed Marks. Licensor shall
not assign any of its rights or obligations hereunder, except (a) in the case
of the death of Licensor, to Licensor's executors, administrators, testamentary
trustees, heirs, devisees, intestates and legatees ("Heirs") and (b) to any one
of Licensor's current or future spouse, parents, siblings or descendants of
such parents', siblings' or spouses (the "Family Members"); provided that such
Heir and Family Member, as the case may be, simultaneously agree to be bound as
a Licensor to all of the obligations of the Licensor under this Agreement;
provided further that any assignee of Licensor's rights or obligations
hereunder is also the assignee of the Licensed Marks.
7. MISCELLANEOUS
7.1. All notices, requests, consents, and other communications hereunder
shall be in writing and shall be deemed to have been properly given or sent (i)
on the date when such notice, request, consent, or communication is personally
delivered or (ii) five (5) days after the same was sent, if sent by certified
or registered mail or (iii) three (3) days after the same was sent, if sent by
overnight courier delivery or confirmed telecopier transmission, as follows:
(a) if to Licensee, to:
Paracelsus Healthcare Corporation
515 West Greens Road, Suite 800
Houston, Texas 77067
Attention: Robert C. Joyner
Senior Vice President and General Counsel
Telecopier No.: (713) 873-6686
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Attention: Thomas C. Janson, Jr.
Telecopier No.: (213) 687-5600
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(b) if to Licensor, to:
Dr. Manfred George Krukemeyer
AM Natruper Holz 69
D-49076 Osnabruck
Federal Republic of Germany
Telecopier No.: (011) 49-541-966-4006
with a copy to:
R.J. Messenger
155 North Lake Avenue, Suite 1100
Pasadena, CA 91101
Telecopier No.: (818) 578-6380
and to:
Dr. Meyer zu Losebeck
Sozietat Dr. H. Mertens
Hasemauer 9
49074 Osnabruck, Germany
Telecopier No.: (011) 49-541-331-1616
Anyone entitled to notice hereunder may change the address to which notices or
other communications are to be sent to it by notice given in the manner
contemplated hereby.
7.2. Nothing herein contained shall be construed to place the parties in
the relationship of partners or joint venturers, and no party hereto shall have
any power to obligate or bind any other party hereto in any manner whatsoever,
except as otherwise provided for herein.
7.3. None of the terms hereof can be waived or modified except by an
express agreement in writing signed by the party to be charged. The failure of
any party hereto to enforce, or the delay by any party in enforcing, any of its
rights hereunder shall not be deemed a continuing waiver or a modification
thereof and any party may, within the time provided by applicable law, commence
appropriate legal proceedings to enforce any and all of such rights. Any party
hereto may employ any of the remedies available to it with respect to any of
its rights hereunder without prejudice to the use by it in the future of any
other remedy with respect to any of such rights. No person, firm, or
corporation, other than the parties hereto shall be deemed to have acquired any
rights by reason of anything contained in this Agreement.
7.4. This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto. Any attempt by Licensor
or Licensee to transfer any of its rights or obligations under this Agreement,
whether by assignment, sublicense or otherwise, other than as explicitly
permitted pursuant to this
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Agreement, shall constitute an event of default, but shall otherwise be null
and void.
7.5. This Agreement shall be construed in accordance with and governed by
the laws of the State of Texas applicable to contracts made and to be wholly
performed therein without regard to its conflicts of law rules, and any
applicable laws of the United States. The parties hereby irrevocably submit to
the jurisdiction of the courts of the State of Texas and the Federal courts of
the United States of America located in the State of Texas solely in respect of
the interpretation and enforcement of the provisions of this Agreement, and in
respect of the transactions contemplated hereby, and hereby waive, and agree
not to assert, as a defense in any action, suite or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or
is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be enforced in
or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
a Texas State or Federal court. The parties hereby consent to and grant any
such court jurisdiction over the person of such parties and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
7.1, shall be valid and sufficient service thereof.
7.6. The provisions hereof are severable, and if any provision shall be
held invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such provision, or part
thereof in such jurisdiction and shall not in any manner affect such provision
in any other jurisdiction, or any other provision in this Agreement in any
jurisdiction. To the extent legally permissible, an arrangement which reflects
the original intent of the parties shall be substituted for such invalid or
unenforceable provision.
7.7. The Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
7.8. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
7.9. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused the same to be executed by a duly authorized officer as of the day and
year first above written.
PARACELSUS HEALTHCARE CORPORATION
("Licensee")
By \s\
----------------------------
Name:
Title:
\s\ MANFRED G. KRUKEMEYER
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Dr. Manfred George Krukemeyer
("Licensor")
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EXHIBIT A
REGISTRATION
MARK NUMBER COUNTRY OWNER
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PHC Paracelsus
Healthcare Corporation
and Design 1,528,932 United States Dr. Manfred G.
Krukemeyer