GAMMA KNIFE NEURORADIOSURGERY EQUIPMENT AGREEMENT
THIS AGREEMENT is made and entered into this 26th of November, 1996 by and
between NEW YORK UNIVERSITY on behalf of NEW YORK UNIVERSITY MEDICAL CENTER
(hereinafter referred to as "NYU"), a New York education corporation, whose
Medical Center's principal offices are located at 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, and U.S. NEUROSURGICAL, INC., a Delaware corporation with its
principal office at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000
(hereinafter referred to as "U.S. Neuro").
WITNESSETH:
WHEREAS, U.S. Neuro has entered into the LGK Purchase Agreement, dated as
of December 29, 1993 (the "Purchase Agreement"; all capitalized terms used
herein without definition shall have the respective meanings set forth in the
Purchase Agreement), pursuant to which U.S. Neuro has agreed to purchase from
Elekta Instruments, Inc. ("Elekta") a "Leksell Gamma Knife" (including the
cobalt supply therefor) which meets the specifications set forth in Exhibit A
attached hereto and made a part hereof and to otherwise provide the equipment
described on Exhibit A (hereinafter, collectively, referred to as the "Gamma
Knife Equipment");
WHEREAS, U.S. Neuro has assigned its right to purchase the Gamma Knife
Equipment under the Purchase Agreement to DVI Financial Services Inc. ("DVI")
and Elekta has consented to such assignment;
WHEREAS, U.S. Neuro and DVI have entered into the Master Equipment Lease
Agreement, dated as of August 1, 1996 (the "DVI Lease Agreement"), pursuant to
which (i) DVI has agreed to take title to the Gamma Knife Equipment and lease it
to U.S. Neuro and (ii) U.S. Neuro has agreed to lease the Gamma Knife Equipment
from DVI and make certain fixed rental payments therefor, all in accordance with
the terms and conditions of the DVI Lease Agreement;
WHEREAS, U.S. Neuro and NYU desire to provide for (i) the installation of
the Gamma Knife Equipment at NYU for use by NYU in the treatment of its
patients, (ii) maintenance, insurance and other matters with respect to U.S.
Neuro's leasehold interest in the Gamma Knife Equipment to be the responsibility
of U.S. Neuro and (iii) the fees payable by NYU for patient procedures
undertaken using the Gamma Knife Equipment;
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NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained and intending to be legally bound, the parties agree as
follows:
ARTICLE I
1.01 CON; Licenses. NYU and U.S. Neuro will work cooperatively to
prepare and file (i) with the Department of Health of the State of New York an
application for a Certificate of Need supporting the installation and use in
patient care of the Gamma Knife Equipment at NYU and any amendments or
supplements thereto that may be necessary (the "CON") and (ii) with New York
City an application for all necessary permits, licenses and/or permissions for
the use of radioactive materials for medical purposes in connection with the
Gamma Knife Equipment. The parties acknowledge that the preparation of such
applications is dependent upon the cooperation of Elekta and DVI and receipt of
all information and documentation necessary to complete such applications. The
costs associated with preparation and submission of such applications shall be
paid by U.S. Neuro.
1.02 Conditions Precedent; Preparation of Facility.
(a) Upon:
(i) obtaining the CON;
(ii) delivery to NYU of an agreement of Elekta (a) to provide
maintenance services for the Gamma Knife Equipment including, without
limitation, the replenishment of the cobalt installed in the Gamma Knife
Equipment at such time as is required in accordance with law and the
operating procedures in place with respect to the Gamma Knife Equipment
and the removal and disposal of any such cobalt and (b) consenting to the
assignment by U.S. Neuro to NYU of all of the warranties, licenses and
other rights with respect to the Gamma Knife Equipment and any related
software or documentation available to the "purchaser" under the Purchase
Agreement, all in form and substance reasonably satisfactory to NYU and
U.S. Neuro;
(iii) DVI having (A) taken title to the Gamma Knife Equipment and
leased such Equipment to U.S. Neuro under the DVI Lease Agreement and (B)
delivered to NYU an agreement of DVI consenting to the terms of this
Agreement and offering to NYU the right to assume the DVI Lease Agreement
upon the occurrence of an event of default on the part of U.S. Neuro, all
in form and substance reasonably satisfactory to NYU and U.S. Neuro;
(iv) U.S. Neuro and NYU obtaining all necessary permits, licenses
and approvals with respect to the use of the
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Gamma Knife Equipment as contemplated by this Agreement from New York City
and any other relevant governmental authority;
(v) U.S. Neuro providing to NYU, at the sole expense of U.S Neuro,
all necessary sublicenses and other rights necessary to enable NYU to
possess and operate the Gamma Knife Equipment including, without
limitation, all software licenses;
(vi) delivery to NYU of a copy of the Test Report delivered by
Elekta under the Purchase Agreement showing compliance of the Gamma Knife
Equipment with the Specifications;
(vii) compliance by U.S. Neuro with all of the conditions precedent
to delivery of the Gamma Knife Equipment under the Purchase Agreement;
(viii) U.S. Neuro causing to be established (x) an escrow account
with a bank satisfactory to NYU in the amount of $825,000 and (y) a firm
commitment on the part of DVI or other third party satisfactory to NYU to
fund an additional $100,000, in each case to fund the cost of constructing
the Neuroradiosurgery Facility in accordance with the terms of this
Agreement (including, without limitation, the infrastructure expenses
referred to in Section 1.02(b)), all on terms and conditions satisfactory
to NYU; and
(ix) delivery to NYU of the construction drawings and specifications
for the Neuroradiosurgery Facility (as defined below) issued by Xxxxxx
Xxxxxxxxxxx & Partners ("Schunkewitz") on July 3, 1996;
U.S. Neuro shall take, or shall cause third persons to take, all steps which may
be necessary or requested by NYU to have prepared, constructed and made ready
NYU's facility located at 000 Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
(the "Neuroradiosurgery Facility") for installation of the Gamma Knife Equipment
in compliance with the terms of the Purchase Agreement, the drawings and
specifications delivered pursuant to Section 1.02(a)(ix) and all applicable law
and regulations including, without limitation, any construction or alteration of
the physical premises, wiring, working with NYU to prepare a safety plan,
providing any temporary and permanent shielding for the Charging of the Gamma
Knife Equipment and its use, building foundations for the Gamma Knife Equipment,
shielding, walls, alignment of the facility, installation of radiation
monitoring equipment, the performance of any testing required by applicable law
and regulations and any resulting modifications or alterations to the Gamma
Knife Equipment and the Neuroradiosurgery Facility. As between U.S Neuro and
NYU, U.S Neuro shall bear all costs and expenses of such preparation and any
liability
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associated therewith; provided that U.S. Neuro shall not bear liability for any
action or failure to act on the part of NYU which constitutes willful misconduct
or negligence.
(b) U.S. Neuro shall construct the Neuroradiosurgery Facility in a
timely manner and in accordance with applicable law and regulations, the
requirements of the Purchase Agreement and the drawings and specifications
issued by Schunkewitz on July 3, 1996. All construction, architecture,
engineering and other work conducted in connection with the construction of the
Neuroradiosurgery Facility shall be performed by third-party contractors
selected by U.S. Neuro and satisfactory to NYU. U.S. Neuro shall contract with
such third-party contractors pursuant to NYU's standard form contracts for such
services modified to reflect the relevant parties and appropriate insurance
coverage for NYU and, in each case, such contracts shall be satisfactory to NYU.
U.S. Neuro shall be solely responsible for payment of all amounts owing to the
third-party contractors under the contracts entered into by U.S. Neuro.
U.S. Neuro shall, at its sole cost, hire a contractor to work
on-site to supervise and administer the construction of the Neuroradiosurgery
Facility and coordinate such construction with other construction projects at
NYU. In addition to reporting to U.S. Neuro, the on-site contractor shall report
regularly to the Vice President for Facilities Management of NYU on the progress
of construction and any outstanding issues relating thereto, and shall consult
with such Vice President as to all decision-making with respect to the
construction.
U.S. Neuro shall deliver to NYU copies of all documentation relating
to the construction received by it or prepared by it and NYU shall at all times
retain final authority over all decision-making by U.S. Neuro with respect to
the construction.
U.S. Neuro shall reimburse NYU for a portion of the cost of certain
infrastructure work being undertaken by NYU to support the Neuroradiosurgery
Facility and other facilities of NYU located nearby consisting of the
installation of a new HVAC unit and related construction. The actual portion for
which U.S. Neuro shall be responsible shall be determined by Schunkewitz and
shall be binding upon both U.S. Neuro and NYU. Within five (5) business days
following delivery by Schunkewitz to U.S. Neuro and NYU of an allocation of such
costs between U.S. Neuro and NYU, U.S. Neuro shall pay the amount so allocated
to it in immediately available funds to NYU. In the event that U.S. Neuro does
not pay such amounts when due, such amounts shall accrue interest at the rate of
12% per annum from the date on which such payment was due to and including the
date on which such payment is actually made. NYU may in addition to other
remedies hereunder, but shall not be under any obligation to, offset such
amounts against any amounts then payable by NYU to U.S. Neuro under this
Agreement
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and apply such amounts to reimburse itself for the payment of such expenses.
(c) Notwithstanding the provisions of Section 1.02(a), in the event
that construction of the Neuroradiosurgery Facility is begun prior to all of the
conditions precedent to such construction having been satisfied in full, such
conditions shall not be deemed to have been waived or modified and U.S. Neuro
shall use its best efforts to satisfy each such condition in full on the
earliest possible date. In the event that (i) all conditions precedent set forth
in Section 1.02(a) shall not have been met by June 30, 1997 or (ii) construction
of the Neuroradiosurgery Facility shall not have been completed in accordance
with the terms of this Agreement, then in each case, this Agreement shall
automatically, without notice or other action, terminate and be of no further
force or effect and U.S. Neuro shall, subject to applicable law and regulations,
provide for any work performed on the Neuroradiosurgery Facility to be
dismantled, any Gamma Knife Equipment to be removed and the premises to be
restored to their original condition, in each case at the sole cost, expense and
liability of U.S. Neuro. In the event that applicable law and regulations
prevent the closing of the Neuroradiosurgery Facility, this Agreement shall
continue on the same terms and conditions until the earliest date upon which the
Facility may be closed in accordance with applicable law and regulations.
(d) In the event that NYU determines that amounts are (i) owed to
contractors employed by U.S. Neuro to construct the Neuroradiosurgery Facility
and such contractors are likely to either cease work on the Facility or impose a
lien or other encumbrance upon any property or asset of NYU or (ii) required to
be expended in order to complete the Neuroradiosurgery Facility in accordance
with Section 1.02(b) and U.S. Neuro has not made provision for such expenditures
in a manner that is reasonably satisfactory to NYU, then NYU may (but shall not
be under any obligation to), in addition to its other remedies hereunder, pay
such amounts itself and offset such amounts against any amounts then payable by
NYU to U.S. Neuro under this Agreement. If there are no payments owing under
this Agreement for NYU to offset against, upon written notice from NYU, U.S.
Neuro shall immediately reimburse NYU for the amount of such payment, together
with interest thereon at the rate of 12% per annum from the date on which NYU
made the payment to and including the date on which NYU is actually reimbursed
therefor.
1.03 Delivery; Installation. Upon completion of the
Neuroradiosurgery Facility to the extent necessary for installation of the Gamma
Knife Equipment, to the satisfaction of NYU, U.S. Neuro shall take all steps
necessary to deliver, or cause third persons to deliver, the Gamma Knife
Equipment, together with all related software and user manuals, to the NYU
facility
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and to undertake all procedures and tasks as are necessary to enable the Gamma
Knife Equipment to be properly subjected to the Acceptance Tests, including
Charging the Gamma Knife Equipment with its Cobalt Supply. As between U.S. Neuro
and NYU, U.S. Neuro shall bear all costs and expenses of such delivery and
installation and any liability associated therewith.
1.04 Acceptance Testing. (a) Promptly upon completion of the
installation of the Gamma Knife Equipment in accordance with the terms of this
Agreement and the Purchase Agreement, U.S. Neuro shall cause Elekta to perform
the Acceptance Tests in the presence of U.S. Neuro and NYU and under the
supervision of such radiation safety personnel as may be required by applicable
law. U.S. Neuro shall be deemed to have accepted the Gamma Knife Equipment under
the Purchase Agreement upon the completion of the Acceptance Tests and the
demonstration that the Gamma Knife Equipment complies with the Specification.
(b) NYU shall have the option of (but shall be under no obligation
to) performing an inspection or causing a third party to perform an inspection
on its behalf to confirm that the Gamma Knife Equipment and the
Neuroradiosurgery Facility satisfy NYU's requirements under this Agreement. Any
such inspection shall be fully supervised by U.S. Neuro and shall occur promptly
following the testing conducted by Elekta.
(c) Upon satisfactory completion of the inspection conducted by
Elekta and any inspection conducted by or on behalf of NYU, NYU shall accept the
Gamma Knife Equipment under this Agreement.
1.05 Documentation. U.S. Neuro shall promptly forward to NYU copies
of all reports, documentation, notices, certificates, diagrams and other
materials prepared by or on behalf of U.S. Neuro or Elekta relating to the
delivery, installation and testing of the Gamma Knife Equipment. Upon any
termination of this Agreement other than a termination resulting from NYU's
exercise of its right to purchase the Gamma Knife Equipment or its right to
terminate this Agreement pursuant to Section 8.01(b), NYU shall, upon written
request of U.S. Neuro, return to U.S. Neuro all such documentation.
ARTICLE II
2.01 Term. The term of NYU's possession and use of the Gamma Knife
Equipment under this Agreement (the "Term") shall begin on the date on which NYU
accepts the Gamma Knife Equipment pursuant to Section 1.04(c) and shall
terminate on the seventh anniversary of such date, unless earlier terminated
pursuant to this Agreement.
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2.02 Renewal Option. Upon the expiration of the Term in accordance
with Section 2.01 and upon the expiration of any Renewal Term (as defined
below), NYU shall have the option, exercisable by giving written notice to U.S.
Neuro within 90 days prior to the expiration of the Term, of extending the Term
for successive three year periods (each, a "Renewal Term").
2.03 Purchase Option. (a) At the end of the Term and at the end of
each Renewal Term, NYU shall have the option of purchasing the Gamma Knife
Equipment at a price equal to the then fair market value of the Gamma Knife
Equipment as established by an appraiser chosen by NYU and reasonably
satisfactory to U.S. Neuro. Any such sale shall be pursuant to instruments and
documentation satisfactory to NYU including, without limitation, an express
retention by U.S. Neuro of all liability for the installation, testing,
maintenance and operation of the Gamma Knife Equipment prior to such transfer,
other than liability in connection with the operation of the Gamma Knife
Equipment resulting from action or inaction on the part of NYU which constitutes
willful misconduct or negligence. NYU may exercise such option no later than 120
days prior to the end of the Term or any Renewal Term by notifying U.S. Neuro
thereof in writing.
(b) Notwithstanding clause (a) of this Section 2.03, within 10 days
after delivery to U.S. Neuro of an appraisal pursuant to clause (a), U.S. Neuro
may deliver written notice to NYU that it elects to in good faith negotiate the
purchase price with NYU. In such event, U.S. Neuro shall bear half of the costs
associated with the obtaining of the appraisal and the parties shall in good
faith negotiate a purchase price for the Gamma Knife Equipment. Upon failure of
the parties to agree to a purchase price prior to the end of the Term or such
Renewal Term, U.S. Neuro may request that the Neuroradiosurgery Facility be
closed. Upon receipt of a request of U.S. Neuro to close the Neuroradiosurgery
Facility, NYU and U.S. Neuro shall negotiate in good faith to close the Facility
subject to applicable law and regulations, provide for the Neuroradiosurgery
Facility to be dismantled, the Gamma Knife Equipment to be removed and the
premises to be restored to their original condition, in each case at the sole
cost, expense and liability of U.S. Neuro. In the event that applicable law and
regulations prevent the closing of the Neuroradiosurgery Facility, this
Agreement shall continue on the same terms and conditions until the earliest
date upon which the Facility may be closed in accordance with applicable law and
regulations.
ARTICLE III
3.01 The NYU Facility. The Neuroradiosurgery Facility shall be
available for patient care and staffed by NYU personnel during NYU's normal
hospital business hours. NYU acknowl-
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edges that the availability of the Gamma Knife Equipment for patient care is
subject to preventive maintenance work and unavoidable equipment failures. The
Neuroradiosurgery Facility shall at all times be under the sole control of NYU
and NYU may institute such policies and procedures concerning access to the
Facility or otherwise as it may deem necessary or appropriate.
3.02 Personnel; Training. The Neuroradiosurgery Facility shall be
staffed with physicists, nurses, technologists and clerical personnel as may be
deemed necessary by NYU for the operation of the Neuroradiosurgery Facility.
U.S. Neuro shall provide, or shall cause Elekta to provide, to the staff
designated on Exhibit B hereto the training necessary for the proper operation
of the Gamma Knife Equipment including, without limitation, all initial, upgrade
and refresher training which is provided by Elekta. Such training shall be at
the sole expense of U.S. Neuro except that U.S. Neuro shall not be responsible
for payment of the travel and living expenses of NYU personnel incurred in
connection with such training.
3.03 Physician and Physicist Training. U.S. Neuro shall provide, or
shall cause Elekta to provide, comprehensive training on the use of the Gamma
Knife Equipment for the physicians and physicists designated on Exhibit B
hereto. Such training shall be at the sole expense of U.S. Neuro, except that
U.S. Neuro shall not be responsible for payment of the travel and living
expenses of NYU personnel incurred in connection with such training, and shall
be provided at clinically operating sites which utilize equipment comparable to
the Gamma Knife Equipment.
3.04 Medical and Office Supplies. U.S. Neuro shall purchase and
maintain sufficient inventories of Gamma Knife Equipment supplies as may be
necessary to ensure continuous availability of the Gamma Knife Equipment during
the business hours of the Neuroradiosurgery Facility. U.S. Neuro shall not be
responsible hereunder for the purchase of expendable supplies used in the
operation of the Neuroradiosurgery Facility (e.g. sponges, office supplies,
medications and solutions).
3.05 Physician Relationships. NYU shall direct and administer all
physician services provided at the Neuroradiosurgery Facility. U.S. Neuro shall
have no oversight or other role in directing or administering such physician
services or the operation of the Neuroradiosurgery Facility. NYU shall provide
to U.S. Neuro a copy of the curriculum vitae of each physicist and physician
operating the Gamma Knife Equipment.
3.06 Information. U.S. Neuro and NYU shall cooperate in an effort to
provide information to the general public about the Gamma Knife Equipment and
the Neuroradiosurgery Facility. The cost of materials produced pursuant to this
Section 3.06 shall be shared equally by U.S. Neuro and NYU.
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ARTICLE IV
4.01 Maintenance of Gamma Knife Equipment. (a) U.S. Neuro shall, at
its sole cost and expense, be responsible for (i) the maintenance, repair and
insuring of the Gamma Knife Equipment in accordance with the terms of this
Agreement, the Purchase Agreement, the DVI Lease Agreement, applicable law and
regulations and any directives issued by Elekta, and otherwise in good, safe and
efficient operating repair, appearance and condition including, without
limitation, keeping all components properly calibrated and aligned and making
all required adjustments, replacements and repairs (except that (A) NYU shall
perform such daily and routine calibration, alignment and cleaning with respect
to which U.S. Neuro has provided training to the staff of the Neuroradiosurgery
Facility pursuant to Section 3.02 and 3.03 and (B) U.S. Neuro shall not bear the
cost of, but shall otherwise be responsible for, repairs resulting from action
on the part of NYU which constitutes willful misconduct or negligence), and (ii)
full compliance with all of the terms and conditions of the Purchase Agreement
and the DVI Lease Agreement, and, in each case, NYU hereby expressly disclaims
any such responsibility. At a minimum, U.S. Neuro shall purchase a preventive
maintenance contract from Elekta or from a vendor approved by Elekta, which
contract shall provide for a remote service diagnostic program, replenishment of
radioactive cobalt 60 as necessary for the proper operation of the Gamma Knife
Equipment and removal and disposal of such cobalt, and updating/upgrading of
computer software as new updates/upgrades which are clinically efficacious and
financially feasible become available.
(b) NYU shall have no duty to inspect the Gamma Knife Equipment or
perform any maintenance or other tasks described in Section 4.01(a) (except the
daily and routine calibration, alignment and cleaning referred to therein) and
U.S. Neuro shall perform such regular inspections of the Gamma Knife Equipment
as it shall deem necessary to comply with its obligations under Section 4.01(a).
However, in the event that a maintenance or other problem is brought to the
attention of NYU, NYU shall promptly notify U.S. Neuro thereof and U.S. Neuro
shall immediately take all steps which may be required to ensure compliance with
Section 4.01(a).
(c) All repairs and preventive maintenance will be performed during
regular business hours and pursuant to a schedule agreed upon by U.S. Neuro and
NYU to minimize delays, interruptions and disruptions of service to patients of
the Neuroradiosurgery Facility and its medical staff. Emergency maintenance and
repairs will be performed by U.S. Neuro at such times as U.S. Neuro and NYU may
agree.
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4.02 Updates, upgrades and enhancements. U.S. Neuro will purchase
and arrange for installation of all hardware and software updates to the Gamma
Knife Equipment at its sole cost and expense. U.S. Neuro shall notify NYU in
writing promptly upon receipt of notice from Elekta of the availability of any
optional and/or mandatory upgrades or enhancements of the Gamma Knife Equipment
(other than the hardware and software contained therein) and NYU and U.S. Neuro
shall mutually determine whether acquisition of such upgrade or enhancement is
necessary for the Neuroradiosurgery Facility to remain competitive with other
neuroradiosurgery facilities. If purchase and installation of such upgrade or
enhancement is determined to be necessary for the Neuroradiosurgery Facility to
remain competitive with other neuroradiosurgery facilities, then U.S. Neuro will
purchase and arrange for installation of such upgrade and/or enhancement. If any
such upgrade or enhancement is not determined to be necessary for the
Neuroradiosurgery Facility to continue to be competitive but NYU requests in
writing that U.S. Neuro acquire such upgrade or enhancement, then (a) U.S. Neuro
shall purchase and arrange for installation of such upgrade or enhancement and
such upgrade or enhancement shall, upon installation, become part of the Gamma
Knife Equipment covered by this Agreement and (b) the schedule of charges set
forth in Section 5.01 shall be increased by an amount sufficient for U.S. Neuro
to recover the cost of such upgrade or enhancement over a period of time
together with a reasonable profit, such increases and payment schedule to be
acceptable to NYU and U.S. Neuro.
4.03 Uptime. U.S. Neuro shall use its best efforts to obtain an
uptime guaranty for the benefit of U.S. Neuro and NYU from Elekta which assures
that the Gamma Knife Equipment will be fully operational for patient use at all
times except such times which, in the aggregate, do not exceed 5% of the total
business hours of the Neuroradiosurgery Facility in any calendar year.
4.04 Purchase Agreement. U.S. Neuro shall, at its sole expense,
exercise all rights as "purchaser" under the Purchase Agreement, or shall cause
DVI to exercise such rights, and obtain all benefits with respect to the Gamma
Knife Equipment thereunder, as may be required in order for U.S. Neuro to comply
with its obligations under this Agreement or as may be requested in writing by
NYU in connection with the operation of the Gamma Knife Equipment or the
Neuroradiosurgery Facility or the performance by NYU of its obligations under
this Agreement.
4.05 Risk of Loss. As between U.S. Neuro and NYU, U.S. Neuro shall
exclusively bear all risk of loss, requisition, damage, theft or destruction
with respect to the Gamma Knife Equipment, except that U.S. Neuro shall not bear
any such risks which result from any action or failure to act on the part of NYU
which constitutes willful misconduct or negligence.
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4.06 Removal of Equipment. If, for any reason other than an exercise
of remedies by NYU pursuant to Section 8.01(b), the Gamma Knife Equipment is to
be removed from the Neuroradiosurgery Facility, NYU shall be given at least 90
days advance written notice of such proposed removal, together with a written
plan describing the steps to be taken to remove the Equipment, to restore the
Neuroradiosurgery Facility to its original condition and to cover the costs of
such removal including, without limitation, appropriate insurance and
indemnification of NYU. NYU shall have the right to review and give its prior
approval (such approval not to be unreasonably withheld or delayed) of any such
plan and the work to be taken pursuant to such plan. Any removal of the Gamma
Knife Equipment from the Neuroradiosurgery Facility shall be (a) subject to
applicable law and regulations and (b) at the sole cost and liability of U.S.
Neuro. In the event that applicable law and regulations prevent the removal of
the Gamma Knife Equipment from the Neuroradiosurgery Facility, this Agreement
shall continue on the same terms and conditions until the earliest date upon
which the Equipment may be removed in accordance with applicable law and
regulations.
ARTICLE V
5.01 U.S. Neuro Compensation. As U.S. Neuro's sole compensation for
the provision of the Gamma Knife Equipment for the Neuroradiosurgery Facility
and all related services provided hereunder, NYU agrees to pay to U.S. Neuro a
fee based on the number of patient procedures performed with the Gamma Knife
Equipment in accordance with the following schedule:
Consecutive Number of Patient Procedures Fee per Procedure
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first through 150th (inclusive)
patient procedures $10,000
151st through 200th (inclusive)
patient procedures $ 8,000
200th and subsequent
patient procedures $ 7,000;
provided that (a) with respect to any patient procedure using the Gamma Knife
Equipment for which NYU is not reimbursed for the full DRG inpatient amount:
(i) because NYU and U.S. Neuro have both participated in an
agreement by NYU with a third-party or the New York State governmental
authorities that determine DRG reimburse-
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ment (the "Governmental Authorities") to a negotiated fee that is lower
than the full DRG inpatient reimbursement, NYU shall be required to pay to
U.S. Neuro the percentage of the actual amount received by NYU as payment
for such patient procedure agreed by NYU and U.S. Neuro;
(ii) because NYU has, without participation by U.S. Neuro, agreed
with a third-party or with the Governmental Authorities to a negotiated
fee that is lower than the full DRG inpatient reimbursement, NYU shall be
required to pay to U.S. Neuro the full fee set forth above;
(iii) because NYU has determined in its sole discretion to provide
charity care using the Gamma Knife Equipment to a patient, NYU shall be
required to pay to U.S. Neuro 50% of the actual amount received by NYU, if
any, as payment for such patient procedure; and
(iv) because a determination has been made by a third party or the
Governmental Authorities to reimburse NYU with respect to such patient
procedure at a rate applicable to ambulatory surgery procedures or
"short-stay" hospital procedures, NYU shall be required to pay to U.S.
Neuro 50% of the actual amount received by NYU as payment for such patient
procedure;
and (b) any patient procedure using the Gamma Knife Equipment for which NYU is
not reimbursed for the full DRG inpatient amount (other than pursuant to clause
(ii) of the proviso to this Section 5.01) shall not be counted for purposes of
calculating the consecutive number of patient procedures referenced above;
provided, further, that (x) in the event the number of patient procedures for
which NYU is not reimbursed for the full DRG inpatient amount for the reason
specified in clause (iii) of the immediately preceding proviso during any
calendar quarter exceeds 10% of all patient procedures performed using the Gamma
Knife Equipment during such calendar quarter, U.S. Neuro may request that U.S.
Neuro and NYU consult in good faith as to appropriate adjustments to the
provisions of Section 5.01 covering such procedures and (y) in the event the
number of patient procedures for which NYU is not reimbursed for the full DRG
inpatient amount for the reasons specified in clauses (iii) and (iv) of the
immediately preceding proviso during any calendar quarter exceeds 40% of all
patient procedures performed using the Gamma Knife Equipment during such
calendar quarter, U.S. Neuro shall have the option, exercisable upon delivery of
written notice to NYU, to request that the Neuroradiosurgery Facility be closed.
Upon receipt of a request of U.S. Neuro to close the Neuroradiosurgery Facility,
NYU and U.S. Neuro shall negotiate in good faith to either (I) substitute a
revised payment scheme taking into account the actual number of reduced-fee
patient procedures or (II) subject to applicable law and regulations, provide
for the
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Neuroradiosurgery Facility to be dismantled, the Gamma Knife Equipment to be
removed and the premises to be restored to their original condition, in each
case at the sole cost, expense and liability of U.S. Neuro. In the event that
applicable law and regulations prevent the closing of the Neuroradiosurgery
Facility, this Agreement shall continue on the same terms and conditions until
the earliest date upon which the Facility may be closed in accordance with
applicable law and regulations.
U.S. Neuro acknowledges and agrees that (a) its participation in any
negotiations with third parties or the Governmental Authorities as to
reimbursement for Gamma Knife procedures may occur indirectly through NYU and
U.S. Neuro agrees to use reasonable efforts to consult with NYU in a timely
manner with respect to any such negotiations and (b) ultimately, NYU shall have
the right to make agreements with such third parties and the Governmental
Authorities as NYU shall deem necessary or appropriate and if U.S. Neuro shall
not have participated in the negotiation of any such agreement, the fee payable
to U.S. Neuro shall be determined in accordance with clause (a) (ii) of the
first proviso to Section 5.01.
NYU and U.S. Neuro agree that, in the event the Governmental
Authorities implement changes to the DRG reimbursement scheme that materially
effect the reimbursement rates for patient procedures using the Gamma Knife
Equipment, NYU and U.S. Neuro will negotiate in good faith to substitute a
revised payment scheme corresponding to such changes and maintaining, to the
extent possible, the allocation of amounts received as reimbursement between NYU
and U.S. Neuro set forth in Section 5.01.
5.02 Billing and Collection. NYU shall be the only party entitled to
xxxx and collect from third party payors and patients for patient procedures
using the Gamma Knife Equipment and for the use of the Neuroradiosurgery
Facility. Physicians who perform patient procedures using the Gamma Knife
Equipment shall be responsible for billing and collection of fees for their
services to patients, and U.S. Neuro shall have no interest in such fees.
5.03 Payment Procedures.
(a) Payement Procedure. Within ten (10) days after the end of each
month in which patient procedures are performed by NYU using the Gamma Knife
Equipment in the Neuroradiosurgery Facility (the "Current Month"), NYU shall pay
to U.S. Neuro an amount equal to (i) the number of patient procedures performed
by NYU during the Current Month for which NYU expects to receive full DRG
reimbursement multiplied by the appropriate fee or fees stated in 5.01 above for
such procedures plus (ii) with respect to patient procedures performed by NYU
during the Current Month or prior months for which NYU did not receive the full
DRG
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inpatient reimbursement amount, the amount, if any, determined to be payable by
NYU pursuant to the first proviso to Section 5.01 (and which are not covered by
fees payable pursuant to clause (i) of this Section 5.03).
(b) Right of Set Off. Notwithstanding the provisions of Section
5.03(a) and in addition to any other offset rights contained in this Agreement,
in the event that NYU makes a payment to U.S. Neuro in error or based on a
reimbursement payment which is later denied, rescinded, revoked or in an amount
less than originally expected by NYU, NYU shall have the right to offset the
amount of such erroneous payments against any amounts due and payable to U.S.
Neuro under Section 5.03(a). If, for any reason, there are no payments under
Section 5.03(a) against which NYU may offset such amounts, U.S. Neuro will pay
such amounts to NYU in immediately available funds promptly upon receipt of a
written statement from NYU therefor.
5.04 Taxes. Any taxes or other similar charges with respect to the
Gamma Knife Equipment shall be payable by U.S. Neuro. Upon written request of
U.S. Neuro, NYU will provide to U.S. Neuro a copy of any applicable exemption
certificate for sales, use or similar taxes which may otherwise be assessable.
5.05 Patient Procedure Record; Inspection. (a) NYU shall maintain a
record in which NYU shall list the number of patient procedures at the
Neuroradiosurgery Facility using the Gamma Knife Equipment. Such record shall be
available for inspection by duly authorized representatives of U.S. Neuro during
normal business hours of the Neuroradiosurgery Facility upon advance written
notice to NYU delivered at least 5 business days prior to the proposed date of
inspection; provided that any such inspection shall not interfere with the
normal operations of the Neuroradiosurgery Facility.
(b) On no more than two occasions per calendar year, U.S. Neuro
shall have the right to perform an audit of NYU's books and records pertaining
to NYU's reimbursement for patient procedures performed using the Gamma Knife
Equipment to verify NYU's compliance with Article V of this Agreement. Any such
audit shall be conducted during NYU's normal business hours upon advance written
notice to NYU delivered at least 30 days prior to the proposed date of audit;
provided that any such audit shall not interfere with the normal operations of
the Neuroradiosurgery Facility or NYU.
(c) Any inspection or audit performed pursuant to this Section 5.05
shall be subject to such limitations and procedures as NYU shall deem necessary
or appropriate to protect the confidentiality of information concerning NYU's
patients and proprietary information of NYU in accordance with all applicable
laws and NYU policies.
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ARTICLE VI
INDEMNITY AND INSURANCE
6.01 Indemnification. (a) U.S. Neuro shall protect, indemnify,
defend and hold NYU, its employees and trustees harmless from and against any
and all cost, loss, damage, liability, obligation, penalty, claim, action, suit
and/or expense including, but not limited to, reasonable attorneys fees,
(whether or not on the basis of negligence, strict or absolute liability,
liability in tort or otherwise) in any way arising out of or resulting from (i)
the design and construction of the Neuroradiosurgery Facility, (ii) the design,
manufacture, maintenance, purchase, acceptance, condition or operation of the
Gamma Knife Equipment, (iii) this Agreement, the Purchase Agreement, the DVI
Lease Agreement or any other agreement entered into by U.S. Neuro, any affiliate
of U.S. Neuro, DVI and/or NYU relating to lease or other financing or
securitization arrangements made with respect to the Gamma Knife Equipment
and/or the construction of the Neuroradiosurgery Facility or (iv) any failure by
the Neuroradiosurgery Facility or the Gamma Knife Equipment to comply with
applicable laws and regulations.
(b) NYU shall protect, indemnify, defend and hold U.S. Neuro and its
employees harmless from and against any and all cost, loss, damage, liability,
obligation, penalty, claim, action, suit which is solely and directly the result
of (i) negligence on the part of NYU or (ii) a breach by NYU of its obligations
under this Agreement.
(c) The terms of this Section 6.01 shall survive the termination of
this Agreement.
6.02 General Liability. Throughout the term of this Agreement, U.S.
Neuro shall procure and maintain at its cost (and shall cause each subcontractor
to maintain) a policy or policies of insurance providing coverage against all
liability resulting from injury to persons or property attributable to the Gamma
Knife Equipment and/or U.S. Neuro personnel or agents on which U.S. Neuro and
NYU are named as additional insureds. Such insurance shall include
products/completed operations liability as well as broad form blanket
contractual liability coverage and professional liability coverage. Coverage
under such insurance shall be in the amount of $5,000,000 per
occurrence/$5,000,000 aggregate and shall be underwritten by insurance companies
reasonably acceptable to NYU's Director of Insurance.
6.03 Fire and Extended Coverage Insurance. Throughout the term of
this Agreement, U.S. Neuro shall procure and maintain at its cost (and shall
cause each subcontractor to maintain), fire and extended coverage insurance
underwritten by insurance
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companies authorized to do business in the State of New York on the Gamma Knife
Equipment to the extent of its full replacement value protecting against loss by
fire, the elements, and other casualties customarily covered by standard fire
and extended coverage insurance policies within the State of New York.
6.04 Automobile Liability Insurance. If U.S. Neuro will be using
automobiles (including vans, buses or similar vehicles) in connection with its
performance of services under this Agreement, U.S Neuro shall procure and
maintain at its cost (and shall cause each subcontractor to procure and
maintain), during the life of this Agreement, Automobile Liability Insurance in
an amount not less than $1,000,000 for bodily injury or death resulting
therefrom for each occurrence, and property damage in an amount not less than
$1,000,000 for each occurrence. This insurance shall apply to all owned,
non-owned, leased or hired vehicles.
6.05 Construction. The contracts covering the construction of the
Neuroradiosurgery Facility which are executed by U.S. Neuro shall require
certain types and amounts of insurance to be procured and maintained by U.S.
Neuro and the subcontractors thereunder at the cost of U.S. Neuro and/or such
subcontractor, including, without limitation, blanket explosion, collapse and
underground coverage, professional liability coverage, general and commercial
liability coverage (including, without limitation, premises operations
liability, occurrence bodily injury and broad form property damage liability,
broad form contractual liability and independent contractors liability
coverage). All such insurance shall be satisfactory to NYU in all respects.
6.06 Other Insurance. Throughout the term of this Agreement, U.S.
Neuro shall procure and maintain at its cost (and shall cause any subcontractor
to procure and maintain), insurance coverage mandated by law for worker's
compensation, occupational diseases, and employer's liability. Such insurance
shall be underwritten by companies authorized to do business in the State of New
York.
6.07 Insurance Policies; Certificates. All insurance policies
(except worker' compensation) shall be endorsed (i) to include NYU as an
additional insured, (ii) to provide that each underwriter thereof agrees that it
shall have no right of recovery or subrogation against NYU, (iii) to provide
that any "other insurance provisions" in any such policy shall not apply to NYU,
(iv) to provide that such insurance companies shall have no recourse against NYU
for payment of any premium or for assessments under any mutual form of policy
and (v) that any and all deductibles in such insurance policies shall be assumed
by, for the account of, and at the sole risk of U.S. Neuro (or the relevant
subcontractor). NYU shall be furnished on an annual
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basis upon renewal or expiration of each policy, and upon request at any time, a
current certificate evidencing each such policy or policies and all additions
and amendments thereto, and all policies shall bear endorsements to the effect
that the insurer will notify NYU not less than 60 days prior to any modification
or cancellation thereof. U.S. Neuro shall cause NYU to be furnished with
complete copies of any policies referred to in this Article upon request of NYU.
ARTICLE VII
7.01 Exclusive Rights. The Purchase Agreement contains a provision
for the benefit of U.S. Neuro which prevents Elekta, for a period of twelve
months following delivery of the Gamma Knife Equipment to the Neuroradiosurgery
Facility, from delivering any gamma knife equipment to any third person for
installation in any of the four following boroughs of New York City: Manhattan,
Bronx, Brooklyn and Queens; and Westchester County; without having first given
U.S. Neuro a right of first refusal to purchase such equipment. U.S. Neuro
acknowledges and agrees that NYU is intended to be a third-party beneficiary of
such agreement. In the event that Elekta offers to U.S. Neuro the right to
purchase a gamma knife (as described above), U.S. Neuro shall within twenty-four
hours thereafter notify NYU in writing thereof and shall provide to NYU such
details relating to the gamma knife, the proposed sale to a third person and the
terms of U.S. Neuro's right of first refusal as NYU may request. At the election
of NYU, U.S. Neuro and NYU shall negotiate in good faith to structure and
consummate a transaction involving the purchase or lease (and financing, if
applicable) of such gamma knife equipment by U.S. Neuro and an agreement for its
use at NYU or, if the demand for gamma knife procedures is significantly greater
at another location within such area, at such location as NYU and U.S. Neuro
shall agree; provided that in the event that NYU and U.S. Neuro shall have
negotiated in good faith during the period that is twenty days following
delivery of notice by U.S. Neuro to NYU hereunder and no agreement on the basic
terms of the transaction have been reached (x) U.S. Neuro shall request that
Elekta extend the period during which the right of first refusal may be
exercised and (y) if Elekta refuses such request or upon the expiration of
one-half of the period of any extension granted by Elekta beyond the original
thirty-day period offered by Elekta to U.S. Neuro under the purchase Agreement,
the parties shall have no further obligation to continue negotiating and U.S.
Neuro may proceed to effect such a transaction without involvement of NYU.
7.02 Representations and Warranties. U.S. Neuro represents and
warrants that (i) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction
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of its organization, and is qualified and in good standing to do business
wherever necessary to carry on its present business and operations, including
New York State, (ii) it has the power to enter into the Purchase Agreement, the
DVI Lease Agreement and this Agreement and the other instruments and documents
executed by U.S. Neuro in connection therewith and herewith (the "Transactional
Documents") and to pay and perform its obligations under this Agreement and the
other Transactional Documents), (iii) this Agreement and the other Transactional
Documents have been duly authorized, executed and delivered by U.S. Neuro, and
constitute the valid, legal and binding obligations of U.S. Neuro enforceable in
accordance with their terms, (iv) no vote or consent of, or notice to, the
holders of any class of stock of U.S. Neuro is required, or if required, such
vote or consent has been obtained or given, to authorize the execution, delivery
and performance of this Agreement and the other Transactional Documents by U.S.
Neuro, (v) neither the execution and delivery by U.S. Neuro of this Agreement or
the other Transactional Documents, nor the consummation by U.S. Neuro of the
transactions contemplated hereby or thereby, nor compliance by U.S. Neuro with
the provisions hereof or thereof, conflicts with or results in a breach of any
of the provisions of any Certificate of Incorporation or By-law or partnership
or trust agreement or certificate of U.S. Neuro, or of any applicable law,
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, administrative agency or other governmental authority, or of any
indenture, mortgage, deed of trust, lease, equipment purchase agreement or other
agreement or instrument of any nature to which U.S. Neuro is a party or by which
it or its property is bound or affected or pursuant to which it is constituted,
or constitutes a default under any thereof or will result in the creation of any
lien, charge, security interest or other encumbrance upon the Gamma Knife
Equipment other than the interests therein of DVI and Elekta, or upon any other
right or property of U.S. Neuro, (vi) no consent, approval, withholding of
objection or other authorization of or by any court, administrative agency,
other governmental authority or any other person is required, except such
consents, approvals or other authorizations which have been duly obtained and
are in full force and effect and copies of which have been furnished to NYU, in
connection with the execution, delivery or performance by U.S. Neuro, or the
consummation by U.S. Neuro, of the transactions contemplated by this Agreement
and the other Transactional Documents, (vii) there are no actions, suits or
proceedings pending, or, to the knowledge of U.S. Neuro, threatened, in any
court or before any administrative agency or other governmental authority
against or affecting U.S. Neuro, which, if adversely decided would or could,
individually or in the aggregate, materially and adversely affect the financial
or other condition, business, operations, properties, assets or prospects of
U.S. Neuro or the ability of U.S. Neuro to perform any of its obligations under
this Agreement or under the other Transactional Documents, except for any such
actions, suits
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or proceedings that U.S. Neuro has described in writing to NYU, (viii) no event
of default or event or condition which upon the passage of time, the giving of
notice, or both, would constitute an event of default hereunder or under any
Transactional Document, exists or is continuing, (x) there has been no material
adverse change or threatened change in U.S. Neuro's financial or other
condition, business, operations, properties, assets or prospects since the date
of U.S. Neuro's most recent financial statements reported on by an independent
public accounting firm prior to the date of this Agreement, or from the written
information that has been supplied to NYU by U.S. Neuro and (x) all information
supplied to NYU by U.S. Neuro is correct and does not omit any statement
necessary to make the information supplied not misleading.
ARTICLE VIII
8.01 Default by U.S. Neuro; Remedies.
(a) Event of Default Defined. If any of the following events occurs,
then such event shall be considered an "Event of Default" with respect to U.S.
Neuro under this Agreement:
(i) Failure to Perform. If (A) U.S. Neuro fails to observe or
perform any of the covenants, terms or conditions set forth in this Agreement or
(B) DVI or any bank or other third party fails to observe or perform its
obligations with respect to U.S. Neuro's lease or other financing of the Gamma
Knife Equipment or the construction of the Neuroradiosurgery Facility, and in
each case such failure continues for a period of thirty (30) days after written
notice thereof is given by NYU to U.S. Neuro (unless such failure cannot
reasonably be cured within such 30-day period and U.S. Neuro commences to cure
such failure within such 30-day period and continues diligently without
interruption to pursue the curing of the same until completed); or
(ii) Breach of Representations. If any representation or
warranty of U.S. Neuro contained in this Agreement shall be incorrect or false
in any material respect; or
(iii) Bankruptcy of U.S. Neuro. U.S. Neuro shall consent to
the appointment of or taking possession by a receiver, assignee, custodian,
sequestrator, trustee or liquidator (or other similar official) of itself or of
a substantial part of its property, or U.S. Neuro shall admit in writing its
inability to pay its debts generally as they come due or shall fail generally to
pay its debts as they become due or shall make a general assignment for the
benefit of its creditors, or U.S. Neuro shall file a voluntary petition in
bankruptcy or a voluntary petition or answer seeking or consenting to
liquidation, reorganization or
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other relief with respect to itself or its debts under the Federal bankruptcy
laws, as now or hereafter constituted or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or shall consent to the entry of an
order for relief in an involuntary case under any such law or U.S. Neuro shall
file an answer admitting the material allegations of a petition filed against it
in any such proceeding, or otherwise seek relief or consent to the granting of
relief under the provisions of any existing or future Federal or State
bankruptcy, insolvency or other similar law providing for the reorganization or
winding-up of corporations, or providing for an arrangement, agreement,
composition, extension or adjustment with its creditors, or U.S. Neuro shall
take or publicly announce its intention to take corporate action in furtherance
of any of the foregoing; or
(iv) Default in Other Agreements. If a default occurs under
any agreement between U.S. Neuro and any third party providing equipment,
services or financing to U.S. Neuro in connection with the Gamma Knife
Equipment, which default is not cured within the applicable cure period set
forth under such agreement.
(b) Remedies. Upon the occurrence of an Event of Default as defined
in Section 8.01(a), NYU shall be entitled without any further notice to U.S.
Neuro, to elect to exercise one or more remedies then available including,
without limitation (i) exercising one or more of its options under any separate
agreement between DVI and NYU, (ii) terminating this Agreement and requiring
U.S. Neuro to remove the Gamma Knife Equipment from the Neuroradiosurgery
Facility, or (iii) exercising any remedies which may be available to NYU under
applicable law, and/or to seek any other remedies to which it may be entitled at
law or equity. Further, if the Event of Default is bankruptcy of U.S. Neuro,
then NYU shall be entitled to relief from any automatic stay imposed by Section
362 of Title 11 of the U.S. Code, as amended, or otherwise, on or against the
exercise of the rights and remedies otherwise available to NYU. In the event of
any bankruptcy filing by or against U.S. Neuro, U.S. Neuro agrees that neither
U.S. Neuro nor the debtor in possession nor the bankruptcy trustee shall seek to
assume nor shall any of them be entitled to assume this Agreement and in such
event NYU may immediately seek to exercise any of its rights and remedies under
this Agreement.
8.02 Default by NYU; Remedies.
(a) Event of Default Defined. If any of the following events occurs,
then such event shall be considered an "Event of Default" with respect to NYU
under this Agreement.
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(i) Nonpayment. If NYU fails to make any payment within
forty-five (45) days of the date such payment was due to U.S. Neuro hereunder,
and such failure of payment continues for more than fifteen (15) days following
written notice from U.S. Neuro; or
(ii) Failure to Perform. If NYU fails to observe or perform
any of the covenants, terms or conditions set forth in this Agreement and such
failure continues for a period of thirty (30) days after written notice thereof
is given by U.S. Neuro to NYU (unless such failure cannot reasonably be cured
within such 30-day period and NYU commences to cure such failure within such
30-day period and continues diligently without interruption to pursue the curing
of the same until completed); or
(iii) Bankruptcy of NYU. NYU shall consent to the appointment
of or taking possession by a receiver, assignee, custodian, sequestrator,
trustee or liquidator (or other similar official) of itself or of a substantial
part of its property, or NYU shall admit in writing its inability to pay its
debts generally as they come due or shall fail generally to pay its debts as
they become due or shall make a general assignment for the benefit of its
creditors, or NYU shall file a voluntary petition in bankruptcy or a voluntary
petition or answer seeking or consenting to liquidation, reorganization or other
relief with respect to itself or its debts under the Federal bankruptcy laws, as
now or hereafter constituted or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or shall consent to the entry of an
order for relief in an involuntary case under any such law or NYU shall file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, or otherwise seek relief or consent to the granting of relief
under the provisions of any existing or future Federal or State bankruptcy,
insolvency or other similar law providing for the reorganization or winding-up
of corporations, or providing for an arrangement, agreement, composition,
extension or adjustment with its creditors, or NYU shall take or publicly
announce its intention to take corporate action in furtherance of any of the
foregoing.
(b) Remedies. Upon the occurrence of an Event of Default as defined
in Section 8.02(a), U.S. Neuro shall be entitled, without any further notice to
NYU, to terminate this Agreement, to remove the Gamma Knife Equipment from the
Neuroradiosurgery Facility in accordance with Section 4.06, to exercise any
remedies which may be available to U.S. Neuro under this Agreement, and to seek
any other remedies to which it may be entitled at law or equity.
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ARTICLE IX
9.01 Notices. All notices under this Agreement shall be delivered in
hand or sent by registered mail or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to NYU:
New York University Medical Center
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Vice President for Finance
If to U.S. Neuro:
U.S. Neurosurgical, Inc.
Attn: President
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
or to such other addresses as may from time to time be designated by any party
by like notice.
ARTICLE X
10.01 Waiver. A waiver by either party of any breach or breaches,
default or defaults, of the other party hereunder shall not be deemed or
construed to be a continuing waiver of such breach or default, nor as a waiver
or permission, express or implied, of any subsequent breach or default, unless
such waiver be in writing.
10.02 Remedies Cumulative. NYU's and U.S. Neuro's rights and
remedies shall be cumulative and may be exercised and enforced concurrently. Any
right or remedy conferred upon either party under this Agreement shall not be
deemed to be exclusive of any other right or remedy it may have.
10.03 Compliance with Laws, Etc. Each party shall comply with all
laws and regulations applicable to the performance of its obligations hereunder
and U.S. Neuro shall make available to NYU requested data or information
necessary to comply with requirements of regulatory agencies (including, but not
limited to, Medicare, Medicaid, the Nuclear Regulatory Commission, and the New
York State Department of Health), and the Joint Commission on the Accreditation
of Health Care Organization and other accrediting bodies, as applicable.
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10.04 No Practice of Medicine by U.S. Neuro. Neither U.S. Neuro nor
any of its personnel shall in any way undertake the practice of medicine, render
medical opinions or services, or in any way deal with patients in connection
with the operation of the Gamma Knife Equipment or the Neuroradiosurgery
Facility hereunder, other than to provide those specific ancillary and technical
services required for proper operation of the Gamma Knife Equipment. Further,
U.S. Neuro covenants that it will not, directly or indirectly, employ or
contract for use or operation of the Gamma Knife Equipment by any physician,
group of physicians, physician organization or organization providing physician
services.
10.05 Assignment.
(a) By NYU. NYU may, without consent or approval by U.S. Neuro,
assign this Agreement to (i) a parent, subsidiary, affiliate or related entity
to NYU; (ii) an entity that acquires substantially all of the ownership
interests or assets of NYU or the NYU Medical Center (or any successor to the
foregoing) or (iii) an entity formed by NYU or NYU Medical Center (or any
successor to the foregoing) and other institutions, and upon delivering notice
of any such assignment, NYU shall be released from any further obligation to
U.S. Neuro hereunder, except for payment for services rendered through the date
of assignment. Except as provided in the preceding sentence, NYU may assign this
Agreement only with the prior written consent of U.S. Neuro, which consent will
not be unreasonably withheld or delayed. U.S. Neuro may condition its consent
upon reasonable assurances of performance received from NYU's assignee. Unless
U.S. Neuro's consent to assignment specifically releases NYU, no such assignment
shall release NYU from liability to U.S. Neuro under this Agreement for periods
prior to such assignment.
(b) By U.S. Neuro. U.S. Neuro may assign this Agreement only with
prior written consent of NYU.
(c) Subcontracts. U.S. Neuro may not assign, delegate or subcontract
any of its obligations under this Agreement to a third person without obtaining
the prior written consent of NYU.
10.06 HHS Requirements. Pursuant to the provisions of Section 952,
Section 1861(v) (1) of the United States Social Security Act as amended, U.S.
Neuro agrees for a period of up to four (4) years after furnishing service under
this Agreement, to make this Agreement and certain of its books, documents, and
records available, upon written request of the Secretary of the United States
Department of Health and Human Services, or upon the written request of the
United States Controller General, or their representatives, for the purpose of
determining the nature and extent of the reasonable cost under this Agreement.
U.S. Neuro further agrees that should it be permitted to subcontract
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any of the services it performs under this Agreement, U.S. Neuro will require
its subcontractors to agree to a similar provision to make available books,
documents and records until the expiration of four (4) years after furnishing
such services under this Agreement in the same manner as set forth above.
10.07 Partial Invalidity. If any term, covenant, condition or
provision of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, all other
provisions of this Agreement, or the application of such terms or provisions to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each and every other term,
covenant, condition and provision of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
10.08 Successors. All rights and liabilities herein given to or
imposed upon the respective parties hereto shall, except as may be otherwise
herein restricted, prohibited or provided, extend to and bind the respective
successors and permitted assigns of the parties.
10.09 No Partnership or Agency. In connection with the rights,
obligations and performance of this Agreement, NYU shall in no event be
construed or held to be a partner, associate, principal or agent of U.S. Neuro
in the conduct of U.S. Neuro's business or otherwise, or a joint venturer or a
member of a joint enterprise with U.S. Neuro, nor shall NYU be liable for any
debts incurred by U.S. Neuro in the conduct of U.S. Neuro's business, but it is
understood and agreed that the relationship between the parties hereto is and at
all times shall remain that of independent contractors.
10.10 Delay in Performance due to Force Majeure. In the event either
party hereto shall be delayed or hindered in or prevented from the performance
of any act required hereunder by reason of fire, catastrophe, acts of God or the
public enemy, government agency (including New York State Health Systems
Agency), prohibitions or delays in approval, strikes, lockouts, civil
commotions, inability to obtain materials or labor, governmental regulations or
prohibitions, failure of power or other utilities, or other reason of a like
nature not the fault of the party delayed in performing work or doing acts
required under the terms of this Agreement, then performance of such act shall
be excused for the period of the delay, and the period for the performance of
any such act shall be extended for a period equivalent to the period of such
delay.
10.11 Governing Law. This Agreement shall be governed exclusively by
the provisions hereof and by the laws of the State of New York, as the same may
from time to time exist. By its
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execution of this Agreement, U.S. Neuro subjects itself to the jurisdiction of,
and consents to be sued by NYU in, any court of the City or State of New York or
of the United States of America located in the Borough of Manhattan, City and
State of New York, with respect to any matter arising from this Agreement. U.S.
Neuro agrees that the filing in any such court of a true copy of this Agreement
by NYU shall constitute conclusive evidence of such consent, and that any
summons, complaint or other document required by NYU to commence any lawsuit in
any such court may be served upon it by messenger or mailed by prepaid
registered or certified first class mail, return receipt requested, to its
address set forth in Section 9.01.
10.12 Captions. The captions, section numbers and article numbers
appearing in this Agreement in no way define, limit, construe or describe the
scope or intent of such sections or articles of this Agreement.
10.13 Entire Agreement. This Agreement, together with all attached
exhibits, set forth all the covenants, promises, agreements, conditions and
understandings between NYU and U.S. Neuro concerning the subject matter hereof.
There are no oral agreements or understandings between the parties hereto
affecting this Agreement, and this Agreement supersedes and cancels any and all
previous negotiations, arrangements, agreements and understandings, if any,
between the parties hereto with respect to the subject matter hereof. Except as
herein otherwise expressly provided, no subsequent alteration, amendment, change
or addition to this Agreement shall be binding upon NYU or U.S. Neuro unless
reduced to writing and signed by them.
10.14 Confidentiality. Each of U.S. Neuro and NYU understands that
this Agreement and any information provided to or made available to the other
party which has been marked "confidential" and, with respect to U.S. Neuro, all
information and data concerning patients of NYU, any patient procedure using the
Gamma Knife Equipment and the business affairs of NYU, is considered by U.S.
Neuro and NYU to be privileged and confidential. Each of U.S. Neuro and NYU
agrees that it will treat this Agreement and any such information and data as
privileged and confidential and will not, without the prior written consent of
the other party, disclose or cause to be disclosed the terms hereof or thereof
to any person, except as may be required by applicable law or by the terms of
this Agreement.
IN WITNESS WHEREOF, NYU and U.S. Neuro have caused this Agreement to be
duly executed in multiple counterpart copies, each of which shall be deemed an
original, but together shall constitute one and the same instrument, as of the
date first set forth above.
NEW YORK UNIVERSITY
By:_________________________
Title:______________________
U.S. NEUROSURGICAL, INC.
By:_________________________
Title:______________________
EXHIBIT A
GAMMA KNIFE HARDWARD SPECIFICATIONS
TREATMENT PLANNING SYSTEM
-------------------------
Leksell GammaPlan High End, 735/125
To Include: 1) 128 MB RAM
2) Codonics Printer in addition to
standard HP Laserjet 5MP printer
Back-Up Software $10,000.00
CALIBRATION EQUIPMENT
---------------------
a. Electrometer - CNMC Model 206 $4,000.00
b. Chamber - Capentec PR-05P (0.07cc) $1,188.00
c. Cable $260.00
d. Barometer-Xxxxxxx PB1 $375.00
e. Thermometer - T-1A $75.00
QUALITY CONTROL AND RADIATION SAFETY EQUIPMENT
----------------------------------------------
a. Thermoluminescence (prior to 11/1/96) $11,150.00
Dosimeter - Bicron Corp. (after to 11/1/96) $12,900.00
b. TLD oven $2,840.00
c. Survey Meter - Victoreen 450 $1,500.00
d. Area monitor - Primalert 10 $1,600.00
e. TLD measurement by Standards Laboratory $450.00 per year
EXHIBIT B
TRAINING OF PERSONNEL
At a minimum, U.S. Neuro shall arrange for the following personnel
to be trained in use of the Gamma Knife in accordance with Section 3.02 and
3.03:
2 Neurosurgeons
3 Physicians
2 Physicists
2 Nurses.
Initial Off-Site Training
U.S. Neuro shall arrange for the personnel referred to above to receive
initial clinical training on use of the Gamma Knife at Karolinska Hospital in
Stockholm, Sweden, the University of Virginia Hospital in Charlottesville,
Virginia, or Presbyterian University Hospital in Pittsburgh, Pennsylvania. The
actual facility will be chosen by U.S. Neuro and NYU based on availability,
accessibility and cost.
Initial On-Site Training
U.S. Neuro shall provide or arrange for an aggregate of forty hours of
on-site training in the technical operation and maintenance of the Gamma Knife
for the personnel referred to above and at least two Registered Therapy
Technologists. Additional initial on-site training will be provided by U.S.
Neuro upon request of NYU at reasonable rates to be agreed by the parties.
IN WITNESS WHEREOF, NYU and U.S. Neuro have caused this Agreement to be
duly executed in multiple counterpart copies, each of which shall be deemed an
original, but together shall constitute one and the same instrument, as of the
date first set forth above.
NEW YORK UNIVERSITY
By: /s/ [ILLEGIBLE]
----------------------------------------
Title: Vice President for Finance
-------------------------------------
New York University Medical Center
U.S. NEUROSURGICAL, INC.
By:_________________________________________
Title:______________________________________
IN WITNESS WHEREOF, NYU and U.S. Neuro have caused this Agreement to be
duly executed in multiple counterpart copies, each of which shall be deemed an
original, but together shall constitute one and the same instrument, as of the
date first set forth above.
NEW YORK UNIVERSITY
By:_________________________________________
Title:______________________________________
U.S. NEUROSURGICAL, INC.
By: /s/ [ILLEGIBLE]
----------------------------------------
Title: Controller
-------------------------------------
