EXHIBIT 10.2
License Agreement
This License Agreement, dated as of January 1, 2003, is by
and between Baptist Health System ("Baptist"), a Texas non-profit
corporation, and VHS San Antonio Partners, L.P. (the "Company"),
a Delaware limited partnership.
Whereas, Baptist, the Baptist Health System Foundation, the
Company and Vanguard Health Systems, Inc. ("Vanguard") are
parties to a Purchase and Sale Agreement dated as of October 8,
2002 (the "Purchase Agreement"), pursuant to which Baptist agreed
to transfer to the Company substantially all of the assets of
Seller used in the conduct of the hospitals owned by Baptist and
located in and around San Antonio, Texas (the "Hospitals"); and
Whereas, Baptist and Vanguard Health Financial Company, Inc.
("VHFC") are parties to an Agreement (the "Shareholders
Agreement") dated of even date herewith between the Shareholders
of VHS Acquisition Subsidiary Number 5, Inc., the general partner
of the Company (the "General Partner"), pursuant to which, among
other things, the parties set forth certain agreements regarding
the organization and capitalization of and the conduct of
business by the General Partner, as general partner of the
Company; and
Whereas, Baptist has retained all right, title and interest
in and to the name "Baptist" (the "Name") and any derivatives
including the Name used in the operation of the Hospitals; and
Whereas, the Company desires to continue using the Name in
connection with its operation of the Hospitals and the other
healthcare businesses developed or acquired by the Company in and
around the San Antonio metropolitan area on the terms and
conditions hereinafter set forth.
Now, Therefore, in consideration of the foregoing and of the
mutual promises hereinafter set forth, the parties agree as
follows:
1. Grant of License. On the terms and subject to the
conditions of this Agreement, Baptist grants to the Company a
perpetual, exclusive right and license to use the Name in
connection with the conduct of the Company's business in and
around San Antonio, Texas.
2. Royalty. Concurrently with the execution hereof the
Company shall pay to Baptist as a non-refundable royalty the sum
of $10.00, the receipt and adequacy of which are acknowledged by
Baptist. Such sum shall be deemed fully earned when paid and
shall not be subject to any offset or credit of any kind or
nature.
3. Ownership of Name. The Company acknowledges that there
is substantial value to the goodwill associated with the Name,
that the Name and that nothing in this Agreement gives the
Company any right, title or interest in the Name other than the
right to use the Name in accordance with this Agreement.
4. Future Uses. The Company shall use the Name in
connection with the acquisition or development of another
hospital or other healthcare facility in Bexar County, Texas,
subject to the provisions of the Shareholders Agreement.
5. Marketing Activities. Except as expressly provided
under this Agreement, and provided that all uses of the Name in
advertising and marketing are in accordance with the terms and
conditions of this Agreement, the Company shall have the full
right, power and authority to expend any advertising funds
desired to be expended by the Company in any media, and in any
form that it wishes, and Baptist shall have no right or
obligation to direct such expenditures in any manner whatsoever.
6. Protection Against Infringement. The Company shall
assist Baptist to the extent reasonably necessary in the
procurement of any protection of, or to protect any of Baptist's
rights in and to, the Name. The Company shall promptly notify
Baptist of any infringements or imitations by others of the Name,
or of the use of any trade name or trademark that is the same as
or similar to those covered by this Agreement that come to the
Company's attention. The Company shall not institute any suit or
take any action on account of any such infringements or
imitations and as between Baptist and the Company, Baptist shall
be solely responsible for defending and protecting the Name and
prosecuting infringements thereof.
7. Reservation of Rights. Nothing contained in this
Agreement shall be construed as a consignment or grant to the
Company of any right, title or interest in or to the Name, it
being understood that all rights relating thereto are reserved by
Baptist excepting only the right and license granted herein to
use the Name as specifically provided in this Agreement. Upon
the termination of this Agreement, the Company will be deemed to
have assigned, transferred and conveyed to Baptist any rights,
equities, goodwill and other rights in and to the Name which may
have been obtained by the Company or which may have vested in the
Company in pursuance of any endeavors covered hereby, and that
the Company will execute any instruments requested by Baptist to
accomplish or confirm the foregoing. Any such assignment,
transfer or conveyance shall be without other consideration other
than the mutual covenants and consideration of this Agreement.
8. Term and Termination.
(a) This Agreement shall continue in force and effect from
the date hereof and shall automatically terminate (i) upon the
Company's bankruptcy or insolvency, whether voluntary or
involuntary, or (ii) upon the appointment of any receiver or
trustee to take possession of the properties of the Company.
(b) Baptist may terminate this Agreement immediately upon
notice to the Company if the Company, Vanguard, VHFC or any
successor thereto, breaches in a material respect any obligations
of such entity under this Agreement, the Purchase Agreement or
the Shareholders Agreement, which breach has not been cured by
such entity responsible for such breach within 30 days after
Baptist gives written notice thereof to the Company or, in case
the breach is not capable of being cured within 30 days, the
person responsible for such breach commences the cure within 30
days and diligently prosecutes such cure to completion.
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(c) In addition, Baptist may terminate this Agreement
immediately upon notice to the Company if any event, activity or
circumstance occurs relating to the Company's operation of the
Hospitals, or relating to the operation by any person that
directly or indirectly controls or is controlled by, or is under
common control with, the Company ("Company Affiliate") of any of
such Company Affiliate's businesses, which event, activity or
circumstance Baptist reasonably determines is likely to
compromise the integrity or the ongoing business or reputation of
Baptist and which has not been cured by the Company or the
applicable Company Affiliate within 30 days after Baptist gives
written notice thereof to the Company.
(d) Upon the termination of this Agreement pursuant to this
Section 8, the Company shall immediately discontinue the further
use of the Name and shall not thereafter use the Name in any
manner or for any purpose, directly or indirectly, provided that
the Company may continue to use letterhead, business cards and
other supplies and disposables existing at the time of
termination for a period not to exceed 90 days.
9. Indemnification by the Company. The Company shall
defend, indemnify and hold harmless Baptist from and against any
and all suits, actions, claims, judgments, debts, obligations or
rights of action, of any nature or description, and all costs
(including attorneys' fees) incurred by Baptist in connection
therewith, arising out of or relating to the Company's use of the
Name in the conduct of its business, whether such use is in
compliance with or in violation of this Agreement. Baptist shall
notify the Company of any such suit, action, claim, judgment,
debt, obligation or right of action, promptly upon receiving
notice or being informed of the existence thereof. Upon such
notice from Baptist, the Company shall, at its sole cost and
expense, promptly take such action as may be necessary to protect
and defend Baptist against such suit, action, claim, judgment,
debt, obligation or right of action. Subject to the Company's
compliance with its obligations hereunder, Baptist shall not have
any power or authority to settle or compromise any such suit,
action, claim, judgment, debt, obligation or right of action, and
Baptist shall cooperate reasonably with the Company in connection
with the defense thereof. Baptist shall have the right to
employ separate counsel and participate in the defense,
settlement or compromise of any claim or action at its own cost
and expense.
10. Indemnification by Baptist. Baptist shall defend,
indemnify and hold harmless the Company from and against any and
all suits, actions, claims, judgments, debts, obligations or
rights of action, of any nature or description, and all costs
(including attorneys' fees) incurred by the Company in connection
therewith, alleging that the use of the Name by the Company in
accordance with this Agreement infringes any trademark, service
xxxx, copyright or similar proprietary right of any other person.
The Company shall notify Baptist of any such suit, action, claim,
judgment, debt, obligation or right of action, promptly upon
receiving notice or being informed of the existence thereof.
Upon such notice from the Company, Baptist shall, at its sole
cost and expense, promptly take such action as may be necessary
to protect and defend the Company against such suit, action,
claim, judgment, debt, obligation or right of action. Subject to
Baptist's compliance with its obligations hereunder, the Company
shall have no power or authority to settle or compromise any such
suit, action, claim, judgment, debt, obligation or right of
action, and the Company shall cooperate fully with Baptist in
connection with the defense thereof. The Company shall have the
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right to employ separate counsel and participate in the defense,
settlement or compromise of any claim or action at its own cost
and expense.
11. Rights of Baptist. The termination of this Agreement
shall be without prejudice to any other rights or claims of
Baptist against the Company, or any other remedy available to it
and such termination shall not relieve either party of its
obligations to the other existing at the time of termination or
terminate those obligations of either party which, by their
nature, survive the termination of this Agreement. Without
limiting of the foregoing, Sections 9 and 10 shall survive the
termination of this Agreement.
12. Access to Books and Records. Upon the written request
of the Secretary of Health and Human Services or the Comptroller
General or any of their duly authorized representatives, Baptist
and any of its affiliates providing services with a value or cost
of $10,000 or more over a 12-month period shall make available to
the Secretary the contract, books, documents and records that are
necessary to verify the nature and extent of the cost of
providing such services. Such inspection shall be available up
to four years after the rendering of such services. The parties
agree that any applicable attorney-client, accountant-client, or
other legal privilege shall not be deemed waived by virtue of
this Agreement.
13. Entire Agreement. This Agreement supersedes and
terminates all prior agreements between the parties with respect
to the subject matter contained herein, and this Agreement
embodies the entire understanding between the parties relating to
such subject matter, and any and all prior negotiations,
commitments, correspondence, conversations and memoranda are
merged herein and shall be without effect hereon. No promises,
covenants or representations of any kind, other than those
expressly stated herein, have been made to induce either party to
enter into this Agreement. This Agreement, including this
provision against oral modification, shall not be modified or
terminated except in a writing duly signed by each of the parties
hereto, and no waiver of any provision of this Agreement shall be
effective unless in a writing duly signed by the party sought to
be bound.
14. No Assignment. Neither party may assign any of its
rights or obligations under this Agreement, whether by contract,
operation of law or otherwise, without the prior written consent
of the other party, except that (i) the Company may assign this
Agreement, in whole or in part, to any person that acquires one
or more of the Hospitals or other Company businesses that uses
the Name, provided such person assumes the obligations of the
Company hereunder with respect to the use of the Name in
connection with the acquired Hospital or other business by
execution of a substantially similar License Agreement, and (ii)
Baptist may assign this Agreement, in whole or in part, to
Baptist Health System Foundation, a Texas non-profit corporation,
to any person that acquires or has conveyed to it all or
substantially all of the membership interests of Baptist, and to
any person that acquires or has conveyed to it all or
substantially all of the assets and properties of Baptist,
including, without limitation, by merger, consolidation, sale,
grant or other conveyance, and for purposes of applying the "all
or substantially all" standard to any such asset conveyance, less
any untransferred assets retained as reasonable reserves for
contingent or other unsatisfied Baptist liabilities.
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15. Notice. Any notice, demand or communication required,
permitted or desired to be given hereunder shall be deemed
effectively given if given in writing (i) on the date tendered by
personal delivery; (ii) on the date tendered for delivery by
nationally recognized overnight courier, or (iii) on the date
tendered for delivery by United States mail, with postage prepaid
thereon, certified or registered mail, return receipt requested,
in any event addressed as follows:
If to the Company: c/o Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
If to Baptist: Baptist Health System
000 Xxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Box, Esq.
Facsimile: (000) 000-0000
or to such other address or number, and to the attention of such
other Person, as any Party may designate at any time in writing
in conformity with this Section.
16. Miscellaneous. Section headings are for convenience of
reference only and shall not be used to construe the meaning of
any provision of this Agreement. No provision of this Agreement
shall be interpreted for or against either party on the basis
that such party was the draftsman of such provision, both parties
having participated equally in the drafting letter. This
Agreement may be executed in any number of counterparts, each of
which shall be an original and all of which shall together
constitute one agreement. Should any part of this Agreement be
invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity and enforceability of the remaining
portions. No waiver by either party of any breach or series of
breaches or defaults in performance by the other party, and no
failure, refusal or neglect to exercise any right, power or
option given to either party hereunder or to insist upon strict
compliance with or performance of the obligations under this
Agreement, shall constitute a waiver of the provisions of this
Agreement with respect to any subsequent breach thereof or a
waiver by such party of its right at any time thereafter to
require exact and strict compliance with the provisions thereof.
This Agreement shall be interpreted according to the laws of the
State of Texas, without regard to its conflicts of laws
provisions.
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In Witness Whereof, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
Baptist Health System VHS San Antonio Partners, L.P.
By: VHS Acquisition Subsidiary
Number 5, Inc.,
General Partner
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Title: Title: Executive Vice President
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