PURCHASED SERVICES AGREEMENT
Exhibit 10.57
THIS PURCHASED SERVICES AGREEMENT (“Agreement”) is made and entered into on March 5, 2008, by
and between GK FINANCING, LLC, a California limited liability company (“GKF”), or its wholly owned
subsidiary whose obligation under this agreement shall be guaranteed by GKF, and USC UNIVERSITY
HOSPITAL, Inc. (“Hospital”), with reference to the following facts:
R E C I T A L S
WHEREAS, Hospital wants to obtain the right to use a Leksell Gamma Knife Perfexion (the
“Equipment”), manufactured by Elekta Instruments, Inc., a Georgia corporation (“Elekta”); and
WHEREAS, GKF is willing to provide Hospital with the right to use the Equipment which GKF has
acquired from Elekta, pursuant to the terms and conditions of this Agreement; and
WHEREAS, Hospital is willing to transfer ownership of its current Gamma Knife Model C unit,
serial number (the “Model C”) to GKF for *.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth
herein, and for such other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Right to Use the Equipment. Subject to and in accordance with the covenants and
conditions set forth in this Agreement, GKF hereby grants the right to use the Equipment to
Hospital, and Hospital hereby accepts the right to use the Equipment from GKF. The Equipment to be
placed at the Hospital pursuant to this Agreement shall include the Gamma Knife technology as
specified in Exhibit 1, including all hardware and software related thereto.
2. LGK Agreement. Simultaneously with the execution of this Agreement, Hospital and
Elekta shall enter into that certain Leksell Gamma Knife End User Agreement (the “LGK Agreement”),
a copy of which is attached hereto as Exhibit 2. Hospital shall perform, satisfy and fulfill all
of its obligations arising under the LGK Agreement when and as required thereunder. Hospital
acknowledges that GKF is a third party beneficiary of the LGK Agreement and, in that capacity, GKF
shall be entitled to enforce Hospital’s performance, satisfaction and fulfillment of its
obligations thereunder.
3. Term of the Agreement. The initial term of this Agreement (the “Term”) shall
commence as of the date hereof and, unless earlier terminated or extended in accordance with the
provisions of this Agreement, shall continue for a period of ten (10) years following the date of
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the performance of the first clinical Procedure (as defined in Section 8) performed on the
Equipment (the “First Procedure Date”) at the Site (as defined in Section 5.1). The parties agree
to amend this Agreement to memorialize the First Procedure Date upon the performance of the first
clinical Procedure performed on the Equipment. Hospital’s obligation to make the Purchased
Services Payments to GKF for the Equipment described in Section 8 below shall commence as of the
First Procedure Date.
4. User License. Hospital shall apply for and use its reasonable efforts to obtain in
a timely manner a User License from the Nuclear Regulatory Commission and, if necessary, from the
applicable state agency authorizing it to take possession of and maintain the Cobalt supply
required in connection with the use of the Equipment during the term of this Agreement. Hospital
also shall apply for and use its reasonable efforts to obtain in a timely manner all other
licenses, permits, approvals, consents and authorizations which may be required by state or local
governmental or other regulatory agencies for the development, construction and preparation of the
Site, the charging of the Equipment with its Cobalt supply, the conduct of acceptance tests with
respect to the Equipment, and the use of the Equipment during the Term, as more fully set forth in
Article 2.1 of the LGK Agreement. GKF shall provide assistance to the Hospital in applying for and
for obtaining all such licenses, permits, approvals, consents or authorizations. If the applicable
regulatory authorities affirmatively decline to issue a required license, permit, approval, consent
or authorization notwithstanding Hospital’s best efforts to obtain the same, all parties shall be
released from further performance or any obligations or duties arising under this Agreement.
5. Delivery of Equipment; Site.
5.1 GKF shall coordinate with Elekta and Hospital to have the Equipment delivered to Hospital
at the site at which the Model C is currently located, as described in Exhibit 5.1 of this
Agreement (the “Site”), which delivery shall be on or prior to the delivery date agreed upon by
Elekta and GKF when the Equipment is ordered by GKF. GKF makes no representations or warranties
concerning delivery of the Equipment to the Site or the actual date thereof.
5.2 Hospital shall provide access to the Site for the Equipment. GKF at its cost and expense
shall prepare the Site for the Equipment in accordance with Elekta’s guidelines, specifications,
technical instructions and site planning criteria (which site planning criteria are attached as
Exhibit 5.2 of this Agreement) (collectively the “Site Planning Criteria”). The location of the
Site has been agreed upon by Hospital and GKF as described in Exhibit 5.1 of this Agreement.
6. Site Preparation, Deinstallation of Model C and Installation of
Equipment.
6.1 GKF, at its cost, expense and risk, shall prepare all plans and specifications required to
construct and improve the Site for the installation, use and operation of the Equipment during the
Term. The plans and specifications shall comply in all respects with
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the Site Planning Criteria and with all applicable federal, state and local laws, rules and
regulations. All plans and specifications prepared by or on behalf of GKF (and all material changes
thereto following approval by Hospital and Elekta) shall be subject to the written approval of
Hospital and Elekta prior to commencement of construction at the Site. GKF shall provide Hospital
and Elekta with a reasonable period of time for the review and consideration of all plans and
specifications following the submission thereof for approval. Following approval of the plans and
specifications by Hospital and Elekta, GKF, at its cost and expense, shall assist Hospital in
obtaining all permits, certifications, approvals or authorizations required by applicable federal,
state or local laws, rules or regulations necessary to construct and improve the Site for the
installation, use and operation of the Equipment.
6.2 Based upon the plans and specifications approved by Hospital and Elekta, GKF, at its cost,
expense and risk, shall prepare, construct and improve the Site as necessary for the installation,
use and operation of the Equipment during the Term, including, without limitation, providing all
temporary or permanent shielding required for the charging of the Equipment with the Cobalt supply
and for its subsequent use, selecting and constructing a proper foundation for the Equipment and
the temporary or permanent shielding, aligning the Site for the Equipment, and installing all
electrical systems and other wiring required for the Equipment. In connection with the
construction of the Site, GKF, at its cost and expense, shall select, purchase and install all
radiation monitoring equipment, devices, safety circuits and radiation warning signs required, if
any, at the Site in connection with the use and operation of the Equipment, all in accordance with
applicable federal, state and local laws, rules, regulations or custom.
6.3 GKF, at its cost, expense and risk, shall be responsible for the installation of the
Equipment at the Site, including the positioning of the Equipment on its foundation at the Site in
compliance with the Site Planning Criteria.
6.4 GKF ensures that, to its best knowledge, upon completion of construction, the Site shall
(a) comply in all respects with the Site Planning Criteria and all applicable federal, state and
local laws, rules and regulations, and (b) be safe and suitable for the ongoing use and operation
of the Equipment during the Term.
6.5 GKF at its cost, expense and risk, shall coordinate with Elekta the deinstallation and
removal of the Model C including unloading and disposing of the cobalt.
6.6 GKF shall use its reasonable efforts to satisfy its obligations under this Section 6 in a
timely manner. GKF shall keep Hospital informed on a regular basis of its progress in the design
of the Site, the preparation of plans and specifications, the construction and improvement of the
Site, and the satisfaction of its other obligations under this Section 6. In all events, GKF shall
complete all construction and improvement of the Site required for the installation, positioning
and testing of the Equipment on or prior to the delivery date described in Section 5.1 above.
During the Term, Hospital, at its cost and expense, shall maintain the Site in a good working
order, condition and repair, reasonable wear and tear excepted.
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6.7 GKF shall be responsible for all costs and expenses in connection with Section 6.1, 6.2,
6.3 and 6.5 up to *. All costs in excess of * shall be the responsibility of Hospital.
7. Marketing Support. GKF, in coordination with Hospital, shall provide Hospital with
marketing support for the service to be provided by Hospital using the Equipment. Notwithstanding
the preceding sentence or any provision to the contrary herein, GKF shall not engage in any direct
or indirect marketing or advertising of the Gamma Knife services to be rendered by Hospital during
the term of this Agreement. Not less than ninety (90) days prior to the First Procedure Date and
the commencement of each succeeding twelve (12) month period during the Term, GKF and Hospital
shall develop a mutually agreed upon marketing budget and plan (“Plan”) for the clinical service to
be supported by the Equipment for the succeeding twelve (12) month period of the Term. Once
approved, the Plan shall be implemented by Hospital in accordance with its terms. If Hospital has
not approved or disapproved of the Plan within thirty (30) days following its receipt, Hospital
shall be deemed to have approved the same. All advertisements, brochures and other marketing
materials pertaining to the Plan shall be subject to review and written approval by Hospital and
GKF prior to their use. Hospital and GKF shall discuss the Plan on a regular basis not less than
once per quarter. Hospital’s and any Hospital subsidiary’s or related corporation’s name,
trademarks, service marks, or other identifying names, marks, images or designations shall be and
remain the sole and exclusive property of Hospital, but which may be used in any approved marketing
materials without payment of any license or royalty fee. As funds are expended by Hospital in
accordance with the Plan, Hospital shall submit invoices (together with documentary evidence
supporting the invoices) for its expenditures and, promptly following the receipt of such invoices,
GKF shall reimburse Hospital for * of approved expenditures. GKF’s reimbursement to Hospital shall
not exceed an average of * annually during the term of the Agreement. It is acknowledged by the
parties that such expenses to be reimbursed by GKF as provided in Section 7 have been included in
GKF’s calculation of Hospital’s Purchased Services Payments so as to allow GKF to recover such GKF
expenses during the Term of this Agreement; provided that, without limiting or otherwise affecting
Hospital’s obligation to pay the Purchased Services Payments as set forth herein.
8. Purchased Services Payments.
(a) The parties have negotiated this Agreement at arm’s length based upon reasonable, jointly
derived, assumptions regarding the capacity for clinical services available from the Equipment,
Hospital’s capabilities in providing high quality radiation oncology services and market dynamics,
GKF’s risk in providing the Equipment, and the provision to GKF of a reasonable rate of return on
its investment in support of the Equipment. Based thereon, the Parties believe that the “Purchased
Services Payments” as defined below represent fair market value for the use of the Equipment, the
deinstallation and removal of the Model C, the preparation, construction and improvement of the
Site, and the marketing support and other services to be provided by GKF to Hospital hereunder.
Hospital undertakes no obligation to perform any minimum number of Procedures on the Equipment and
the use of the Equipment for
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the performance of Procedures is wholly based on the independent judgment of physicians who
order such Procedures to meet the medical needs of their patients.
(b) In consideration for and as compensation to GKF for deinstallation and removal of the
Model C, the preparation, construction and improvement of the Site, installation of the Equipment
and marketing support and the other additional services to be provided by GKF under this Agreement,
Hospital shall pay to GKF, on a monthly basis, the applicable per Procedure payments set forth in
Exhibit 8 of this Agreement (the “Purchased Services Payments”) for each “Procedure” that is
performed by Hospital or its representatives or affiliates, whether on an inpatient or outpatient
basis, and irrespective of whether the Procedure is performed on the Equipment or using any other
equipment or devices, including any “Additional GK Unit” (defined below); provided that no
Purchased Services Payments shall be payable for any Procedures performed at the Hospital using the
Cyberknife equipment as presently configured, upgraded or replaced and located at the Hospital on
the date hereof. Notwithstanding the foregoing, and for the avoidance of doubt, if at any time in
addition to the Equipment, Hospital purchases, leases or otherwise acquires the use of a Leksell
Gamma Knife unit(s) of any model type or configuration (an “Additional GK Unit”), then, in addition
to the Purchased Services Payments that are payable to GKF for Procedures performed using the
Equipment as set forth above, Hospital shall pay to GKF the Purchased Services Payments on a
monthly basis for any and all Procedures performed at the Hospital using the Additional GK Unit,
whether on an inpatient or outpatient basis. As used herein, a “Procedure” means any treatment
that involves stereotactic, external, single fraction, conformal radiation, commonly called
radiosurgery, that may include one or more isocenters during the patient treatment session,
delivered to any site(s) superior to the foramen magnum.
(c) GKF shall submit an invoice to Hospital on the fifteenth (15th) and the last day of each
calendar month (or portion thereof) for the actual number of Procedures performed utilizing the
Equipment (and, if applicable, any Additional GK Unit) during the first and second half of the
calendar month, respectively. Upon request by GKF, Hospital shall inform GKF in writing as to the
number of Procedures performed during that month utilizing the Equipment and any other equipment or
devices. If no Procedures are performed by Hospital or any other person utilizing the Equipment
(and, if applicable, any Additional GK Unit), no Purchased Services Payments shall be owing by
Hospital to GKF. Hospital shall pay the invoice within forty-five (45) days after submission by
GKF to Hospital. All or any portion of an invoice which is not paid in full within ninety (90)
days after submission shall bear interest at the rate of one and one-half percent (1.50%) per month
(or the maximum monthly interest rate permitted to be charged by law between an unrelated,
commercial borrower and lender, if less) until the unpaid invoice together with all accrued
interest thereon is paid in full. Subject to Section 20.1.1 below, if GKF shall at any time accept
a Purchased Services Payment from Hospital after it shall become due, such acceptance shall not
constitute or be construed as a waiver of any or all of GKF’s rights under this Agreement,
including the rights of GKF set forth in Xxxxxxx 00 xxxxxx.
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(x) Within ten (10) days after Hospital’s receipt of written request by GKF, GKF shall have
the right to audit Hospital’s books and records (including, without limitation, the books and
records pertaining to any other radiosurgery equipment or devices) during normal business hours to
verify the number of Procedures that have been performed by Hospital utilizing the Equipment and
any other equipment or devices, and Hospital shall provide GKF with access to such books and
records; provided that any patient names or identifiers or other Protected Health Information shall
not be disclosed.
9. Use of the Equipment.
9.1 The Equipment shall be used by Hospital only at the Site and shall not be removed
therefrom. Hospital shall use the Equipment only in the regular and ordinary course of Hospital’s
business operations and only within the capacity of the Equipment as determined by Elekta’s
specifications. Hospital shall not use nor permit the Equipment to be used in any manner nor for
any purpose which, in the opinion of Elekta or GKF, the Equipment is not designed or reasonably
suitable.
9.2 Notwithstanding anything to the contrary contained in this Agreement, this is an agreement
of purchasing a service only. Nothing herein shall be construed as conveying to Hospital any
right, title or interest in or to the Equipment, except for the express right to use the Equipment
granted herein to Hospital for the Term. All Equipment shall remain personal property (even though
said Equipment may hereafter become attached or affixed to real property) and the title thereto
shall at all times remain exclusively in GKF.
9.3 During the Term, upon the request of GKF, Hospital shall promptly affix to the Equipment
in a prominent place, or as otherwise directed by GKF, labels, plates, insignia, lettering or other
markings supplied by GKF indicating GKF’s ownership of the Equipment, and shall keep the same
affixed for the entire Term. Hospital hereby authorizes GKF to cause this Agreement or any
statement or other instrument showing the interest of GKF in the Equipment to be filed or recorded,
or refiled or re-recorded, with all governmental agencies considered appropriate by GKF. Hospital
also shall promptly execute and deliver, or cause to be executed and delivered, to GKF any
statement or instrument reasonably requested by GKF for the purpose of evidencing GKF’s interest in
the Equipment, including financing statements and waivers with respect to rights in the Equipment
from any owners or mortgagees of any real estate where the Equipment may be located.
9.4 At Hospital’s cost and expense, Hospital shall (a) protect and defend GKF’s ownership of
and title to the Equipment from and against all persons claiming against or through Hospital, (b)
at all times keep the Equipment free from any and all liens, encumbrances, attachments, levies,
executions, burdens, charges or legal processes imposed against Hospital, (c) give GKF immediate
written notice of any matter described in clause (b), and (d) in the manner described in Section 22
below indemnify GKF harmless from and against any loss, cost or expense (including reasonable
attorneys’ fees) with respect to any of the foregoing.
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10. Additional Covenants of Hospital. In addition to the other covenants of Hospital
contained in this Agreement, Hospital shall, at its cost and expense:
10.1 Provide properly trained professional, technical and support personnel and supplies
required for the proper performance of Gamma Knife procedures utilizing the Equipment. In this
regard, Hospital shall make reasonable efforts to maintain on staff a minimum of two (2) Gamma
Knife trained teams comprised of neurosurgeons, radiation oncologists and physicists. The Gamma
Knife shall be available for use by all credentialed neurosurgeons, radiation oncologists and
physicists.
10.2 Direct, supervise and administer the provision of all services relating to the
performance of Procedures utilizing the Equipment in accordance with all applicable laws, rules and
regulations.
10.3 Provide reasonable and customary marketing materials (i.e. brochures, announcements,
etc.) together with administrative and physician support (e.g., seminars for physicians by
neurosurgeons and radiation therapists, in accordance with Hospital’s policies and procedures,
etc.) for the Equipment to be operated by the Hospital. The obligation to provide marketing
materials and administration and physician support shall be included in, and not in addition to,
the annual marketing budget referenced in Section 7 above.
10.4 Keep and maintain the Equipment and the Site fully protected, secure and free from
unauthorized access or use by any person to the extent that Hospital provides security for its
other radiation oncology services.
10.5 Operate a fully functional radiation therapy department at the Site or Affiliate site
which shall include the Equipment.
11. Additional Covenants of GKF. In addition to the other covenants of GKF contained
in this Agreement, GKF, at its cost and expense, shall:
11.1 Use its best efforts to require Elekta to meets its contractual obligations to GKF and
Hospital upon delivery of the Equipment and put the Equipment, as soon as reasonably possible, into
good, safe and serviceable condition and fit for its intended use in accordance with the
manufacturer’s specifications, guidelines and field modification instructions.
11.2 Cause Hospital to enjoy the use of the Equipment, free of the rights of any other persons
except for those rights reserved by GKF or granted to Elekta under the LGK Agreement.
12. Maintenance of Equipment; Damage or Destruction of Equipment.
12.1 During the Term and except as otherwise provided in this Agreement, GKF, at its cost and
expense, shall (a) maintain the Equipment in good operating condition and
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repair, reasonable wear and tear excepted, and (b) maintain in full force and effect a service
agreement with Elekta (“Service Agreement”) and any other service or other agreements required to
fulfill GKF’s obligation to repair and maintain the Equipment under this Section 12. Hospital
shall promptly notify GKF in the event of any damage or destruction to the Equipment or of any
required maintenance or repairs to the Equipment, regardless of whether such repairs or maintenance
are covered or not covered by the Service Agreement. GKF shall pursue all remedies available to it
under the Service Agreement and under any warranties made by Elekta with respect to the Equipment
so that the Equipment will be free from defects in design, materials and workmanship and will
conform to Elekta’s technical specifications concerning the Equipment.
12.2 GKF and Elekta shall have the right to access the Equipment for the purpose of inspection
and the performance of repairs at all reasonable times, upon reasonable advance notice and with a
minimum of interference or disruptions to Hospital’s regular business operations.
12.3 Hospital shall be liable for, and in the manner described in Section 22 below shall
indemnify GKF from and against, any damage to or destruction of the Equipment caused by the misuse,
improper use, or other intentional and wrongful or negligent acts or omissions of Hospital’s
officers, employees, agents, contractors and physicians. In the event the Equipment is damaged as
a result of the misuse, improper use, or other intentional and wrongful or negligent acts or
omissions of Hospital’s officers, employees, agents, contractors and/or physicians, to the extent
such damage is not covered by the Service Agreement or any warranties or insurance, GKF may service
or repair the Equipment as needed and the cost thereof shall be paid by Hospital to GKF immediately
upon written request together with interest thereon at the rate of one and one-half percent (1.50%)
per month (or the maximum monthly interest rate permitted to be charged by law between an
unrelated, commercial borrower and lender, if less) and reasonable attorneys’ fees and costs
incurred by GKF in collecting such amount from Hospital. Any work so performed by GKF shall not
deprive GKF of any of its rights, remedies or actions against Hospital for such damages.
12.4 If the Equipment is rendered unusable as a result of any physical damage to or
destruction of the Equipment, Hospital shall give GKF written notice thereof. GKF shall determine,
within thirty (30) days after it is given written notice of such damage or destruction, whether the
Equipment can be repaired. In the event GKF determines that the Equipment cannot be repaired (a)
subject to Section 12.3 above, GKF, at its cost and expense, shall replace the Equipment as soon as
reasonably possible taking into account the availability of replacement equipment from Elekta,
Elekta’s other then existing orders for equipment, and the then existing limitations on Elekta’s
manufacturing capabilities, (b) the Term of this Agreement shall be extended for the period of time
the Equipment is unusable, and (c) this Agreement shall continue in full force and effect as though
such damage or destruction had not occurred. In the event GKF determines that the Equipment can be
repaired, GKF shall cause the Equipment to be repaired as soon as reasonably possible thereafter.
Hospital shall fully cooperate with GKF to effect the
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replacement of the Equipment or the repair of the Equipment (including, without limitation,
providing full access to the Site) following the damage or destruction thereof.
13. Alterations and Upgrades to Equipment.
13.1 Hospital shall not make any modifications, alterations or additions to the Equipment
(other than normal operating accessories or controls) without the prior written consent of GKF.
Hospital shall not, and shall not permit any person other than representatives of Elekta or any
other person authorized by GKF to, effect any inspection, adjustment, preventative or remedial
maintenance, or repair to the Equipment without the prior written consent of GKF. All
modifications, alterations, additions, accessories or operating controls incorporated in or affixed
to the Equipment (herein collectively called “additions” and included in the definition of
“Equipment”) shall become the property of the GKF upon termination of this Agreement.
13.2 The necessity and financial responsibility for modifications, additions or upgrades to
the Equipment, including the reloading of the Cobalt-60 source, shall be mutually agreed upon by
GKF and Hospital. In the event GKF and Hospital agree to reload the Cobalt-60 source (i.e., in
approximately the seventh (7th) year of the Term), and GKF pays the costs associated therewith,
notwithstanding any provisions to the contrary herein, the initial Term shall be automatically
extended for an additional two years.
14. Financing of Equipment by GKF. GKF, in its sole discretion, may finance the
Equipment. Financing may be in the form of an installment loan, a capitalized lease or other
commercially available debt or financing instrument. If GKF finances the Equipment through an
installment loan, GKF shall be required to provide the Equipment as collateral for the loan. If
GKF finances the Equipment through a capitalized lease, title shall vest with the lessor until such
time as GKF exercises its buy-out option under the lease, if any. If required by the lender,
lessor or other financing entity (the “Lender”), GKF may assign its interest under this Agreement
as security for the financing. Hospital’s interest under this Agreement shall be subject to the
interests of the Lender.
15. Equipment Operational Costs. Except as otherwise expressly provided in this
Agreement, Hospital shall be responsible and liable for all costs and expenses incurred, directly
or indirectly, in connection with the operation and use of the Equipment during the Term,
including, without limitation, the costs and expenses required to provide trained physicians,
professionals, and technical and support personnel, supplies and other items required to properly
operate the Equipment and perform Procedures.
16. Taxes. GKF shall pay all sales or use taxes imposed or assessed in connection
with the use or purchase of the Equipment and all personal property taxes imposed, levied or
assessed on the ownership and possession of the Equipment during the Term. All other taxes,
assessments, licenses or other charges imposed, levied or assessed on the Equipment during the Term
shall be paid by Hospital before the same shall become delinquent, whether such taxes are assessed
or would ordinarily be assessed against GKF or Hospital; provided, however, Hospital
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shall not be required to pay any federal, state or local income, franchise, corporation or
excise taxes imposed upon GKF’s net income realized from the lease of the Equipment. In case of a
failure by either party to pay any taxes, assessments, licenses or other charges when and as
required under this Section, the other party may pay all or any part of such taxes, in which event
the amount paid by such paying party shall be immediately payable to the paying party upon written
request together with interest thereon at the rate of at the rate of one and one-half percent
(1.50%) per month (or the maximum monthly interest rate permitted to be charged by law between an
unrelated, commercial borrower and lender, if less).
17. No Warranties by GKF. Hospital warrants that as of the First Procedure Date, it
shall have (a) thoroughly inspected the Equipment to the best of their knowledge, (b) determined
that to the best of its knowledge the Equipment is consistent with the size, design, capacity and
manufacture selected by it, and (c) satisfied itself that to the best of its knowledge the
Equipment is suitable for Hospital intended purposes and is good working order, condition and
repair. GKF will work with Hospital in good faith to remedy any problems identified in writing by
Hospital during Hospital’s inspection. GKF SUPPLIES THE EQUIPMENT UNDER THIS AGREEMENT IN ITS “AS
IS” CONDITION. GKF, NOT BEING THE MANUFACTURER OF THE EQUIPMENT OR THE MANUFACTURER’S AGENT, MAKES
NO WARRANTY OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE EQUIPMENT’S MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR USE, DESIGN, CONDITION, DURABILITY, CAPACITY, MATERIAL OR
WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE. As between GKF and Hospital, Hospital shall
bear all risks with respect to the foregoing warranties. GKF shall not be liable for any direct,
indirect and consequential losses or damages suffered by Hospital or by any other person, and
Hospital expressly waives any right to hold GKF liable hereunder for, any claims, demands and
liabilities arising out of or in connection with the design, manufacture, possession or operation
of the Equipment, including, without limitation, injury to persons or property resulting from the
failure of, defective or faulty design, operation, condition, suitability or use of the Equipment.
All warranty or other similar claims with respect to the Equipment shall be made by Hospital solely
and exclusively against Elekta and any other manufacturers or suppliers, but shall in no event be
asserted against GKF. In this regard and with prior written approval of GKF, Hospital may, in
GKF’s name, but at Hospital sole cost and expense, enforce all warranties, agreements or
representations, if any, which may have been made by Elekta or manufacturers, suppliers or other
third parties regarding the Equipment to GKF or Hospital. GKF shall not be responsible for the
delivery or operation of the Equipment or for any delay or inadequacy of either or both of the
foregoing.
18. Termination for Economic Justification. If, following the initial thirty six (36)
months after the First Procedure Date and following each subsequent 12 month period thereafter
during the Term, based upon the utilization of the Equipment and other factors considered relevant
by GKF in the exercise of its reasonable discretion, within a reasonable period of time after GKF’s
written request, Hospital does not provide GKF with a reasonable economic justification to continue
this Agreement and the utilization of the Equipment at the Hospital, then
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and in that event, GKF shall have the option to terminate this Agreement by giving a written
notice thereof to Hospital not less than one hundred eighty (180) days prior to the effective date
of the termination designated in GKF’s written notice. For purposes of this Section, “reasonable
economic justification to continue this Agreement” shall not be deemed to exist if, during the
twelve (12) month period immediately preceding the issuance of GKF’s written notice of termination,
the “Net Cash Flow” is negative. As used herein, “Net Cash Flow” shall mean, for the applicable
period, (a) the aggregate Purchased Services Payments during such period, minus (b) the sum of the
aggregate (i) debt service on the Equipment, (ii) maintenance expenses, (iii) marketing support,
and (iv) Equipment-related personal property taxes and insurance during such period.
19. Options to Extend Agreement. As of the end of the Term, Hospital shall have the
option either to:
19.1 Extend the Term of this Agreement for a specified period of time and upon such other
terms and conditions as may be agreed upon by GKF and Hospital;
19.2 Terminate this Agreement as of the expiration of the Term.
Hospital shall exercise one (1) of the two (2) options referred to above by giving an irrevocable
written notice thereof to GKF at least one (1) year prior to the expiration of the initial Term.
Any such notice shall be sufficient if it states in substance that Hospital elects to exercise its
option and states which of the two (2) options referred to above Hospital is exercising. If
Hospital fails to exercise the option granted herein at least one (1) year prior to the expiration
of the initial Term, the option shall lapse and this Agreement shall expire as of the end of the
initial Term. Further, if Hospital exercises the option specified in Section 19.1 above and the
parties are unable to mutually agree upon the length of the extension of the Term or any other
terms or conditions applicable to such extension prior to the expiration of the Term, this
Agreement shall expire as of the end of the initial Term.
20. Events of Default by Hospital and Remedies.
20.1 The occurrence of any one of the following shall constitute an event of default under
this Agreement (an “Event of Default”):
20.1.1 Hospital fails to pay any Purchased Services Payment when due pursuant to Paragraph 8
above and such failure continues for a period of thirty (30) days after written notice thereof is
given by GKF or its assignee to Hospital; however, if Hospital cures the Purchased Services Payment
default within the applicable thirty (30) day period, such default shall not constitute an Event of
Default.
20.1.2 Hospital attempts to remove, sell, transfer, encumber, assign, sublet or part with
possession of the Equipment or any items thereof, except as expressly permitted herein.
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20.1.3 Hospital fails to observe or perform any of its covenants, duties or obligations
arising under this Agreement or the LGK Agreement and such failure continues for a period of thirty
(30) days after written notice thereof by GKF to Hospital; however, if Hospital cures the default
within the applicable thirty (30) day period or if the default reasonably requires more than thirty
(30) days to cure, Hospital commences to cure the default during the initial thirty (30) day period
and Hospital diligently completes the cure within sixty (60) days following the end of the thirty
(30) day period, such default shall not constitute an Event of Default.
20.1.4 Hospital ceases doing business as a going concern, makes an assignment for the benefit
of creditors, admits in writing its inability to pay its debts as they become due, files a
voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition
seeking for itself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar arrangement under any present or future statute, law or regulation or files
an answer admitting the material allegations of a petition filed against it in any such proceeding,
consents to or acquiesces in the appointment of a trustee, receiver, or liquidator of it or of all
or any substantial part of its assets or properties, or it or its shareholders shall take any
action looking to its dissolution or liquidation.
20.1.5 Within sixty (60) days after the commencement of any proceedings against Hospital
seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such proceedings shall not have been dismissed,
or if within thirty (30) days after the appointment without Hospital consent or acquiescence of any
trustee, receiver or liquidator of it or of all or any substantial part of its assets and
properties, such appointment shall not be vacated.
20.1.6 Hospital is suspended or terminated from participation in the Medicare program.
20.2 Upon the occurrence of an Event of Default with respect to Hospital, GKF may at its
option do any or all of the following:
20.2.1 By written notice to Hospital, immediately terminate this Agreement as to the
Equipment, wherever situated. As a result of the termination, GKF may enter upon the Site and
remove the Equipment without liability of any kind or nature for so doing or GKF may demand that
Hospital remove and return the Equipment to GKF, all at Hospital sole cost and expense.
20.2.2 Recover from Hospital as liquidated damages for the loss of the bargain represented by
this Agreement and not as a penalty an amount equal to the present value of the unpaid estimated
future Purchased Services Payments to be made by Hospital to GKF through the end of the Term
discounted at the rate of * which liquidated damages shall become immediately due and payable. The
unpaid estimated future Purchased Services Payments shall be based on the prior twelve (12) months
Purchased Services Payments made by Hospital to
- 12 -
GKF hereunder with an annual * increase thereof through the end of the Term. Hospital and GKF
acknowledge that the liquidated damages formula set forth in this Section 20.2.2 constitutes a
reasonable method to calculate GKF’s damages resulting from an Event of Default under the
circumstances existing as of the date of this Agreement. The liquidated damages remedy available
under this Section 20.2.2 shall apply if and only to the extent an Event of Default has occurred
under Sections 20.1.1 and/or 20.1.2 above.
20.2.3 Sell, dispose of, hold, use or lease the Equipment, as GKF in its sole and absolute
discretion may determine (and GKF shall not be obligated to give preference to the sale, lease or
other disposition of the Equipment over the sale, lease or other disposition of similar Equipment
owned or leased by GKF).
20.2.4 Exercise any other right or remedy which may be available to GKF under the Uniform
Commercial Code or any other applicable law or proceed by appropriate court action, without
affecting GKF’s title or right to possession of the Equipment, to enforce the terms hereof or to
recover damages for the breach hereof or to cancel this Agreement as to the Equipment.
20.2.5 In addition to the foregoing remedies, Hospital shall be liable to GKF for all
reasonable attorneys fees, costs and expenses incurred by GKF as a result of the Event of Default
or the exercise of GKF’s remedies.
20.3 Upon termination of this Agreement or the exercise of any other rights or remedies under
this Agreement or available under applicable law following an Event of Default, Hospital shall,
without further request or demand, pay to GKF all Purchased Services Payments and other sums owing
under this Agreement. In the event that Hospital shall pay the liquidated damages referred to in
Section 20.2.2 above to GKF, GKF shall pay to Hospital promptly after receipt thereof all rentals
or proceeds received from the reletting or sale of the Equipment during the balance of the initial
Term (after deduction of all costs and expenses, including reasonable attorneys fees and costs,
incurred by GKF as a result of the Event of Default), said amount never to exceed the amount of the
liquidated damages paid by Hospital. However, Hospital acknowledges that GKF shall have no
obligation to sell the Equipment. Hospital shall in any event remain fully liable for all damages
as may be provided by law and for all costs and expenses incurred by GKF on account of such
default, including but not limited to, all court costs and reasonable attorneys’ fees. The rights
and remedies afforded GKF under this Agreement shall be deemed cumulative and not exclusive, and
shall be in addition to any other rights or remedies to GKF provided by law or in equity.
21. Insurance.
21.1 During the Term, GKF shall, at its cost and expense, purchase and maintain in effect an
all risk property and casualty insurance policy covering the Equipment. The all risk property and
casualty insurance policy shall be for an amount not less than the replacement cost of the
Equipment. Hospital shall be named as an additional insured party on
- 13 -
the all risk property and casualty insurance policy to the extent of its interest in the
Equipment arising under this Agreement. The all risk property and casualty insurance policy
maintained by GKF shall be evidenced by a certificate of insurance or other reasonable
documentation which shall be delivered by GKF to Hospital upon request following the commencement
of this Agreement and as of each annual renewal of such policy during the Term.
21.2 During the Term, Hospital shall, at its cost and expense, purchase and maintain in effect
general liability and professional liability insurance policies covering the Site (together with
all premises where the Site is located) and the use or operation of the Equipment by Hospital or
its officers, directors, agents, employees, contractors or physicians. The general liability and
professional liability insurance policies shall provide coverage in amounts not less than One
Million Dollars ($1,000,000.00) per occurrence and Five Million Dollars ($5,000,000.00) annual
aggregate. GKF shall be named as additional insured party on the general liability and
professional liability insurance policies to be maintained hereunder by Hospital. The policies to
be maintained by Hospital hereunder shall be evidenced by a certificate of insurance or other
reasonable documentation which shall be delivered by Hospital upon request to GKF no later than the
First Procedure Date and as of each annual renewal of such policies during the Term.
21.3 During the construction of the Site and prior to the First Procedure Date, Hospital, at
its cost and expense, shall purchase and maintain a general liability insurance policy which
conforms with the coverage amounts and other requirements described in Section 21.2 above and which
names GKF as an additional insured party. The policy to be maintained by Hospital hereunder shall
be evidenced by a certificate of insurance or other reasonable documentation which shall be
delivered by Hospital to GKF prior to the commencement of any construction at the Site.
21.4 During the Term, Hospital shall purchase and maintain all workers compensation insurance
to the maximum extent required by applicable law.
22. Indemnification.
22.1 Hospital shall be liable for and shall indemnify, defend, protect and hold GKF and its
members, managers, officers, employees, agents and contractors (collectively “GKF”) harmless from
and against all losses, claims, damages, liabilities, assessments, deficiencies, actions,
proceedings, orders, judgments, liens, costs and other expenses (including reasonable attorney’s
fees) of any nature or kind whatsoever asserted against or incurred by GKF (collectively “Damages”)
which in any manner arise out of or relate to (a) the failure by Hospital to fully perform, observe
or satisfy its covenants, duties or obligations contained in this Agreement or in the LGK
Agreement; (b) negligent, intentional or wrongful acts or omissions by Hospital or any of its
officers, directors, agents, contractors (or their subcontractors), or employees in connection with
the use and operation of the Equipment during the Term; (c) defects arising out of materials or
parts provided, modified or designed by Hospital for or with
- 14 -
respect to the Site; (d) the maintenance of the Site during the Term by Hospital; (e) Damages
to the Equipment caused by the negligent or wrongful acts or omissions of Hospital, its agents,
officers, employees or contractors (if the Equipment is destroyed or rendered unusable, subject to
Section 22.6 below, this indemnity shall extend up to (but not exceed) the full replacement value
of the Equipment at the time of its destruction less salvage value, if any); (f) the events or
occurrences described in Article 7.3 of the LGK Agreement to the same extent that Hospital agrees
to indemnify Elekta thereunder (other than with respect to the failure of the Site to comply with
the Site Planning Criteria or defective maintenance of the Equipment under the Service Agreement);
and (g) any other matters for which Hospital has specifically agreed to indemnify GKF pursuant to
this Agreement.
22.2 Upon the occurrence of an event for which GKF is entitled to indemnification under this
Agreement, GKF shall give written notice thereof to Hospital setting forth the type and amount of
Damages. If the indemnity relates to a Third Party Claim (as defined in Section 22.3 below), the
matter shall be subject to Section 22.3 below. If the indemnity relates to any Damages other than
a Third Party Claim, not more than thirty (30) days after GKF’s written notice is given, Hospital
shall acknowledge its obligation in writing to GKF to indemnify hereunder and pay the Damages in
full to GKF.
22.3 GKF shall give written notice to Hospital as soon as reasonably possible after GKF has
knowledge of any third party claim or legal proceedings (“Third Party Claim”) for which GKF is
entitled to indemnification under this Section 22. Hospital shall (a) immediately assume, at its
sole cost and expense, the defense of the Third Party Claim with legal counsel approved by GKF
(which approval will not be unreasonably withheld, delayed or conditioned), and (b) as soon as
reasonably possible after GKF’s written notice is given to Hospital, acknowledge in writing to GKF
its obligation to indemnify GKF in accordance with the terms of this Agreement. If Hospital fails
to assume the defense of a Third Party Claim or fails to timely acknowledge in writing its
obligation to indemnify GKF, GKF may assume the defense of the Third Party Claim in the manner
described in Section 22.4 below. GKF shall cooperate with Hospital in the defense of any Third
Party Claim. Any settlement or compromise of a Third Party Claim to which GKF is a party shall be
subject to the express written approval of GKF, which approval shall not be unreasonably withheld,
delayed or conditioned as long as an unconditional term of the settlement or compromise is the full
and absolute release of GKF from all Damages arising out of the Third Party Claim. GKF, at its own
cost and expense, may participate on its own behalf with legal counsel of its own selection in the
defense of any Third Party Claim which may have a material impact on GKF.
22.4 If Hospital fails to promptly assume the defense of any Third Party Claim, GKF may assume
the defense of the Third Party Claim with legal counsel selected by GKF, all at the Hospital’s cost
and expense. The defense of an action by GKF under this Section 22.4 shall not impair, limit or
otherwise restrict Hospital’s indemnification obligations arising under this Section 22 or GKF’s
right to enforce such obligations.
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22.5 The indemnity obligations under this Section 22 shall expire on the date that is five (5)
years following the expiration or termination of this Agreement.
22.6 The indemnification obligations set forth in this Agreement are intended to supplement,
and not supersede, supplant or replace, any coverage for Damages which may be available under any
insurance policies that may be maintained by GKF or Hospital. In the event any Damages may be
covered by insurance policies, the parties shall exercise good faith and use their best efforts to
obtain the benefits of and apply the available insurance coverage to the Damages subject to
indemnification under this Agreement. In the event that an insurer provides coverage under an
insurance policy on the basis of a “reservation of rights”, the indemnification obligations under
this Agreement shall apply to all Damages which are finally determined as not being covered under
the insurance policy.
23. Miscellaneous.
23.1 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Hospital shall not assign this
Agreement or any of its rights hereunder or sublease the Equipment without the prior written
consent of GKF, which consent shall not be unreasonably withheld ; provided, however that the
Hospital may assign this Agreement without prior written consent of GKF to an entity controlled by,
controlling, or under common control with the Hospital and which entity is the holder of the
general acute care hospital license for the facility at which the Equipment is located, and
provided further, that such entity shall have credit rating and financial position equivalent to
that of Hospital as reasonably determined by GKF. An assignment or sublease shall not relieve
Hospital of any liability for performance of this Agreement during the remainder of the Term. Any
purported assignment or sublease made without GKF’s prior written consent shall be null, void and
of no force or effect ; provided, however that the Hospital may assign this Agreement without prior
written consent of GKF to an entity controlled by, controlling, or under common control with the
Hospital and which entity is the holder of the general acute care hospital license for the facility
at which the Equipment is located, and provided further, that such entity shall have a credit
rating and financial position equivalent to that of Hospital as reasonably determined by GKF.
23.2 Agreement to Perform Necessary Acts. Each party agrees to perform any further
acts and execute and deliver any further documents which may be reasonably necessary or otherwise
reasonably required to carry out the provisions of this Agreement.
23.3 Validity. If for any reason any clause or provision of this Agreement, or the
application of any such clause or provision in a particular context or to a particular situation,
circumstance or person, should be held unenforceable, invalid or in violation of law by any court
or other tribunal of competent jurisdiction, then the application of such clause or provision in
contexts or to situations, circumstances or persons other than that in or to which it is held
- 16 -
unenforceable, invalid or in violation of law shall not be affected thereby, and the remaining
clauses and provisions hereof shall nevertheless remain in full force and effect.
23.4 Attorney’s Fees and Costs. In the event of any action, arbitration or other
proceedings between or among the parties hereto with respect to this Agreement, the non-prevailing
party or parties to such action, arbitration or proceedings shall pay to the prevailing party or
parties all costs and expenses, including reasonable attorneys’ fees, incurred in the defense or
prosecution thereof by the prevailing party or parties. The party which is a “prevailing party”
shall be determined by the arbitrator(s) or judge(s) hearing the matter and shall be the party who
is entitled to recover his, her or its costs of suit, whether or not the matter proceeds to a final
judgment, decree or determination. A party not entitled to recover his, her or its costs of suit
shall not recover attorneys’ fees. If a prevailing party or parties shall recover a decision,
decree or judgment in any action, arbitration or proceeding, the costs and expenses awarded to such
party may be included in and as part of such decision, decree or judgment.
23.5 Entire Agreement; Amendment. This Agreement together with the Exhibits attached
hereto constitutes the full and complete agreement and understanding between the parties hereto
concerning the subject matter hereof and shall supersede any and all prior written and oral
agreements with regard to such subject matter. This Agreement may be modified or amended only by a
written instrument executed by all of the parties hereto.
23.6 Number and Gender. Words in the singular shall include the plural, and words in
a particular gender shall include either or both additional genders, when the context in which such
words are used indicates that such is the intent.
23.7 Effect of Headings. The titles or headings of the various paragraphs hereof are
intended solely for convenience or reference and are not intended and shall not be deemed to
modify, explain or place any construction upon any of the provisions of this Agreement.
23.8 Counterparts. This Agreement may be executed in one or more counterparts by the
parties hereto. All counterparts shall be construed together and shall constitute one agreement.
23.9 Governing Law. This Agreement shall be interpreted and enforced in accordance
with the internal laws, and not the law of conflicts, of the State of California applicable to
agreements made and to be performed in that State.
23.10 Exhibits. All exhibits attached hereto and referred to in this Agreement are
hereby incorporated by reference herein as though fully set forth at length.
23.11 Ambiguities. The general rule that ambiguities are to be construed against the
drafter shall not apply to this Agreement. In the event that any provision of this Agreement
- 17 -
is found to be ambiguous, each party shall have an opportunity to present evidence as to the
actual intent of the parties with respect to such ambiguous provision.
23.12 Representations. Each of the parties hereto represents (a) that no
representation or promise not expressly contained in this Agreement has been made by any other
party hereto or by any of its agents, employees, representatives or attorneys; (b) that this
Agreement is not being entered into on the basis of, or in reliance on, any promise or
representation, expressed or implied, other than such as are set forth expressly in this Agreement;
(c) that it has been represented by counsel of its own choice in this matter or has affirmatively
elected not to be represented by counsel; (d) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (e) it has full power and
authority to execute, deliver and perform this Agreement, and (f) the execution, delivery and
performance of this Agreement has been duly authorized by all necessary corporate or other similar
action.
23.13 Non-Waiver. No failure or delay by a party to insist upon the strict
performance of any term, condition, covenant or agreement of this Agreement, or to exercise any
right, power or remedy hereunder or under law or consequent upon a breach hereof or thereof shall
constitute a waiver of any such term, condition, covenant, agreement, right, power or remedy or of
any such breach or preclude such party from exercising any such right, power or remedy at any later
time or times.
23.14 Notices. All notices, requests, demands or other communications required or
permitted to be given under this Agreement shall be in writing and shall be delivered to the party
to whom notice is to be given either (a) by personal delivery (in which case such notice shall be
deemed to have been duly given on the date of delivery), (b) by next business day air courier
service (e.g., Federal Express or other similar service) (in which case such notice shall be deemed
given on the business day following deposit with the air courier service), or (c) by United States
mail, first class, postage prepaid, registered or certified, return receipt requested (in which
case such notice shall be deemed given on the third (3rd) day following the date of mailing), and
properly addressed as follows:
| To GKF: | Xxxxx X. Xxxxxx | |||
| Chief Executive Officer | ||||
| GK Financing, LLC | ||||
| Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000 | ||||
| Xxx Xxxxxxxxx, XX 00000 | ||||
| To Hospital: | University of Southern California University Hospital | |||
| 0000 Xxx Xxxxx Xxxxxx | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| Attn: Xxxxxx Xxxxx | ||||
| Chief Executive Officer |
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A party to this Agreement may change his, her or its address for purposes of this Section by giving
written notice to the other parties in the manner specified herein.
23.15 Special Provisions Respecting Medicare and Medicaid Patients
23.15.1 Hospital and GKF shall generate such records and make such disclosures as may be
required, from time to time, by the Medicare, Medicaid and other third party payment programs with
respect to this Agreement in order to meet all requirements for participation and payment
associated with such programs, including but not limited to the matters covered by Section
1861(v)(1)(I) of the Social Security Act.
23.15.1 For the purpose of compliance with Section 1861(v)(1)(I) of the Social Security Act,
as amended, and any regulations promulgated pursuant thereto, both parties agree to comply with the
following statutory requirements (a) Until the expiration of four (4) years after the termination
of this Agreement, both parties shall make available, upon written request to the Secretary of
Health and Human Services or, upon request, to the Comptroller General of the United States, or any
of their duly authorized representatives, the contract, and books, documents and records of such
party that are necessary to certify the nature and extent of such costs, and (b) if either party
carries out any of the duties of the contract through a subcontract with a value or cost of $10,000
or more over a twelve month period, with a related organization, such subcontract shall contain a
clause to the effect that until the expiration of four (4) years after the furnishing of such
services pursuant to such subcontract, the related organization shall make available, upon written
request to the Secretary, or upon request to the Comptroller General, or any of their duly
authorized representatives the subcontract, and books, documents and records of such organization
that are necessary to verify the nature and extent of such costs.
23.16 Force Majeure. Failure to perform by either party will be excused in the event
of any delay or inability to perform its duties under this Agreement directly or indirectly caused
by conditions beyond its reasonable control, including, without limitation, fires, floods,
earthquakes, snow, ice, disasters, acts of God, accidents, riots, wars, operation of law, strikes,
governmental action or regulations, shortages of labor, fuel, power, materials, manufacturer delays
or transportation problems. Notwithstanding the foregoing, all parties shall make good faith
efforts to perform under this Agreement in the event of any such circumstance. Further, once such
an event is resolved, the parties shall again perform their respective obligations under this
Agreement. Notwithstanding the foregoing, and for the avoidance of doubt, no reductions or other
changes to reimbursement amounts and/or payment methodology(ies) pertaining to any third party
payors or governmental programs, including, without limitation, Medicare, Medicaid, any other
federal or state programs, and/or any commercial payors, shall be deemed to constitute a force
majeure event under this Section, and shall not excuse or delay a party’s performance under this
Agreement.
- 19 -
23.17 Independent Contractor. It is mutually understood and agreed that nothing in
this Agreement is intended nor shall be construed to create between GKF and Hospital, with respect
to their relationship hereunder, an employer/employee relationship, a partnership or joint venture
relationship, or a landlord/tenant relationship.
23.18 Notice. The parties hereto agree that, notwithstanding anything to the contrary
set forth in this Agreement, this Agreement is and shall be treated and interpreted as a “finance
lease,” as such term is defined in the California Uniform Commercial Code, that GKF shall be
treated as a finance lessor who is entitled to the benefits and releases from liability accorded to
a finance lessor under the California Uniform Commercial Code. In furtherance of the foregoing,
Hospital acknowledges that, before signing this Agreement, GKF has informed Hospital in writing (a)
that Elekta is the entity supplying the Equipment to GKF, (b) that Hospital is entitled under the
California Uniform Commercial Code to the promises and warranties, including those of any third
party, provided to GKF by Elekta which is the entity supplying the goods in connection with or as
part of the contract by which GKF acquired the Equipment or the right to possession and use of the
Equipment, and (c) that Hospital may communicate with Elekta and receive an accurate and complete
statement of those promises and warranties, including any disclaimers and limitations of them or of
remedies. Hospital also acknowledges that Hospital has selected Elekta to supply the Equipment and
has directed GKF to acquire the Equipment or the right to possession and use of the Equipment from
Elekta.
23.19 Transfer of Title to Model C. Effective upon the commencement of the
deinstallation by GKF of the Model C, and for a purchase price of * Hospital shall sell, assign,
transfer and convey to GKF, and GKF shall purchase and acquire the Model C from Hospital, free and
clear of all liens, encumbrances and adverse claims. In furtherance of the foregoing, concurrently
with the execution of this Agreement, Hospital shall deliver to GKF a duly executed xxxx of sale in
substantially the form set forth on Exhibit 23.19 attached hereto. Hospital shall be responsible
for any sales and use taxes levied by any state or political subdivision thereof which may become
due and owing by reason of the sale of the Model C.
23.20 Compliance Obligations. It is acknowledged that GKF is a vendor whose sole
connection with Xxxxx is providing medical supplies or equipment to Xxxxx, and therefore, GKF is
not a “Covered Person” that is subject to compliance with the Corporate Integrity Agreement between
the Office of the Inspector General of the Department of Health and Human Services, and Xxxxx
Healthcare Corporation.
23.21 Exclusion Lists Screening. Group shall screen all of its current and
prospective owners, legal entities, officers, directors, employees (“Screened Persons”) against (a)
the United States Department of Health and Human Services/Office of Inspector General List of
Excluded Individuals/Entities (available through the Internet at xxxx://xxx.xxx.xxx.xxx),
and (b) the General Services Administration’s List of Parties Excluded from Federal Programs
(available through the Internet at xxxx://xxx.xxxx.xxx) (collectively, the
“Exclusion Lists”) to ensure that none of the Screened Persons (y) are currently excluded,
debarred, suspended, or otherwise
- 20 -
ineligible to participate in Federal healthcare programs or in
Federal procurement or nonprocurement programs, or (z) have been convicted of a criminal offense
that falls within the ambit of 42 U.S.C. § 1320a-7(a), but have not yet been excluded, debarred,
suspended, or otherwise declared ineligible (each, an “Ineligible Person”). If, at any time during
the term of this Agreement any Screened Person becomes an Ineligible Person or proposed to be an
Ineligible Person, Group shall immediately notify Hospital of the same. Screened Persons shall not
include any employee, contractor or agent who is not providing services under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first set forth above.
| “GKF” | GK FINANCING, LLC | |||||
| By: | /s/ Xxxxxx X. Xxxxx
|
|||||
| Policy Committee Member | ||||||
| “HOSPITAL” | USC UNIVERSITY HOSPITAL | |||||
| By: | /s/ Xxxxxx Xxxxx
|
|||||
| Chief Executive Officer | ||||||
- 21 -
Exhibit 1
GAMMA KNIFE TECHNOLOGY
- 22 -
Exhibit 2
LGK AGREEMENT
- 23 -
Exhibit 5.1
DESCRIPTION OF SITE
- 24 -
Exhibit 5.2
SITE PLANNING CRITERIA
- 25 -
Exhibit 8
PER PROCEDURE PAYMENTS
Year
|
Annual Procedures Performed | Fee Per Procedure | ||
1-10
|
* | |||
Notwithstanding anything to the contrary set forth herein, for purposes of determining the per
procedure payment, the number of annual procedures performed shall be reset to zero (0) at the
commencement of each anniversary of the First Procedure Date.
- 26 -
Exhibit 23.19
XXXX OF SALE
This XXXX OF SALE (the “Xxxx of Sale”), is dated the 5th day of March 2008, but is made
effective on the “Effective Date” (defined below), by and between GK FINANCING, LLC, a California
limited liability company (“GKF”), and USC UNIVERSITY HOSPITAL (“Hospital”), with reference to the
following facts:
RECITALS
WHEREAS, Hospital and GKF are parties to a certain Purchased Services Agreement (the
“Agreement”), pursuant to which, among other things, GKF has agreed to deinstall and purchase from
Hospital, and Hospital has agreed to sell to GKF, the Gamma Knife Model C unit currently owned by
Hospital, serial number (the “Model C”). Capitalized terms used herein without
definition shall have the same meanings ascribed to them in the Agreement.
WHEREAS, this Xxxx of Sale shall be executed and delivered by Hospital to GKF concurrently
with the execution and delivery of the Agreement, provided that this Xxxx of Sale shall not
become effective until and upon the commencement of the deinstallation by GKF of the Model C, as
indicated in writing by GKF to Hospital (the “Effective Date”).
NOW, THEREFORE, in consideration of the payment by GKF of the sum of One Dollar ($1.00), and
in further consideration of the mutual covenants and agreements contained in the Agreement, the
receipt and sufficiency of which consideration are hereby acknowledged, Hospital hereby covenants
and agrees as follows:
| 1. | As of the Effective Date, Hospital hereby sells, conveys, assigns, transfers and delivers to GKF, and GKF hereby accepts, all of Hospital’s right, title and interest in and to the Model C, free and clear of all liens, encumbrances and adverse claims. | |
| TO HAVE AND TO HOLD, all and singular, for its own use forever, the Model C hereby sold, assigned, transferred, conveyed and delivered, or intended so to be, unto GKF, its successors and assigns forever. | ||
| 2. | HOSPITAL IS SELLING THE MODEL C IN ITS “AS IS,” “WHERE IS” CONDITION. HOSPITAL, NOT BEING THE MANUFACTURER OF THE MODEL C OR THE MANUFACTURER’S AGENT, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE MODEL C’S MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, DESIGN, CONDITION, DURABILITY, CAPACITY, MATERIAL OR WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE, AND ALL WARRANTIES, EXPRESS OR IMPLIED, ARE EXCLUDED FROM THIS XXXX OF SALE AND SHALL NOT APPLY TO THE GOODS SOLD. THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY LAW, THE DISCLAIMERS CONTAINED HEREIN ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY |
- 27 -
| LAW, RULE OR ORDER. THIS XXXX OF SALE IS IN ALL RESPECTS SUBJECT TO THE PROVISIONS OF THE AGREEMENT AND IS NOT INTENDED IN ANY WAY TO SUPERSEDE, LIMIT OR QUALIFY ANY PROVISION OF THE AGREEMENT. | ||
| 3. | Further Assurances. Each party hereby agrees to make, execute, acknowledge and deliver any and all further documents and instruments, and to do and cause to be done all such further acts, reasonably requested by the other party to evidence and/or in any manner to perfect the transfer and assignment to GKF of the Model C. | |
| 4. | Successors. This Xxxx of Sale shall inure to the benefit of and is binding upon the respective successors and assigns of Hospital and GKF. |
IN WITNESS WHEREOF, the parties have caused this Xxxx of Sale to be executed and delivered
effective as of the date first written above.
“GKF” |
GK FINANCING, LLC | |||||
| By: | /s/ Xxxxxx X. Xxxxx
|
|||||
| Policy Committee Member | ||||||
“HOSPITAL” |
USC UNIVERSITY HOSPITAL | |||||
| By: | /s/ Xxxxxx Xxxxx
|
|||||
| Chief Executive Officer | ||||||
- 28 -
