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Exhibit 10.35
LEASE AGREEMENT FOR A GAMMA KNIFE UNIT
THIS AGREEMENT FOR A GAMMA KNIFE UNIT on this 18th day of February, 2000,
(hereinafter, referred to as the "Agreement") is entered into between GK
Financing, LLC, a California Limited Liability Company, (hereinafter referred to
as "GKF"), and OSF HealthCare System, an Illinois not-for-profit corporation,
owner and operator of Saint Xxxxxxx Medical Center (hereinafter referred to as
"Medical Center").
R E C I T A L S
WHEREAS, Medical Center wants to lease a used Model C Leksell
Stereotactic Gamma Unit Manufactured by Elekta Instruments, Inc., (hereinafter
referred to as the "Equipment"); and
WHEREAS, GKF is willing to lease the Equipment which GKF has previously
acquired from Elekta Instruments, Inc., a Georgia corporation (hereinafter
referred to as "Elekta"), to Medical Center, pursuant to the terms and
conditions of this Agreement.
NOW, therefore, in consideration of the foregoing premises and the
promises contained herein, the parties hereto hereby agree as follows:
1. Execution of LGK Agreement by and between Medical Center and Elekta.
Medical Center agrees that simultaneously with the execution of this Agreement
it shall execute that certain LGK Agreement with Elekta, (hereinafter referred
to as the "LGK Agreement"), a copy of which is attached hereto as Exhibit A and
incorporated herein by this reference. Medical Center agrees to fulfill all of
its obligations under the LGK Agreement and acknowledges that GKF is a third
party beneficiary of the LGK Agreement. Medical Center shall fully indemnify and
hold harmless GKF in the event that GKF suffers any loss, damage, claim or
expense (including attorneys' fees) solely as a result of Medical Center's
breach or alleged breach of the LGK Agreement.
2. Conditions Precedent.
(a) This Agreement is contingent on approval by OSF's Board of
Directors.
(b) If Medical Center requires a CON to install and operate the
Equipment, Medical Center will work diligently toward receipt of a CON for the
Equipment and the provision of services related thereto. In addition, GKF will
provide assistance and support to Medical Center in obtaining a CON. This
granting of a CON by the Illinois Health Facilities Planning Board is a
condition precedent of this Agreement. None of the terms and conditions set
forth herein shall become effective until such CON is granted and pursuant to
Section 4 herein.
3. Delivery of the Equipment and Site preparation. GKF shall arrange to
have the Equipment delivered to Medical Center , at 000 X.X. Xxxx Xxx Xxx.,
Xxxxxx, Xxxxxxxx (the "Site") in coordination with Elekta. GKF shall exert its
best faith efforts to expedite the delivery of the
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Equipment. Notwithstanding the preceding sentence, it is understood and agreed
that GKF has made no representations and warranties to Medical Center concerning
actual delivery dates or schedules for the Equipment at the Site.
Medical Center shall provide a safe, convenient and properly prepared
Site, at its own expense, in accordance with all of the Equipment manufacturer's
(Elekta's) guidelines, specifications, technical instruments and Site Planning
Criteria (which Site Planning Criteria are attached to the LGK Agreement as
Exhibit B and incorporated therein), which criteria shall include Elekta's
estimated delivery schedule when and as received by GKF, on Medical Center
controlled property (The "Site") for the proper performance of Gamma Knife
procedures. Site location shall be acceptable to GKF. Medical Center shall
prepare at its sole cost and expense the requisite site plans and specifications
and shall submit them to Elekta and GKF for approval. Medical Center shall
obtain, in a timely manner, a User License from the Nuclear Regulatory
Commission and/or appropriate state agency authorizing it to take possession of
the Cobalt Supply and shall obtain such other licenses, permits, approvals,
consents and authorizations, which may be required by local governmental or
other regulatory agencies for the Site, its preparation, the charging of the
Equipment with its Cobalt Supply, the conduct of Acceptance tests, and the use
of the Equipment all as more fully set forth in Article 2.1 of the LGK
Agreement.
4. Commencement of Term. The Term (hereinafter defined) of this Agreement
shall commence upon the performance of the first clinical Gamma Knife procedure
at the Site (the "Commencement Date"). Medical Center shall become liable to GKF
for the payments referred to in Paragraph 7 hereinbelow upon the Commencement
Date.
5. Costs of Site Preparation; Costs of Installation. Medical Center's
obligations shall include preparation of plans and specifications for the
construction and preparation of the Site in such form as will result in the
Site, when constructed in accordance with such plans and specifications, being
in full compliance with Elekta's Site Planning Criteria. Medical Center shall at
its own expense and risk, prepare, construct and make ready the Site as
necessary, for the installation of the Equipment, including, but not limited to,
providing any temporary and/or permanent shielding for the charging of the
equipment and its use, selecting and preparing a proper foundation for the
Equipment and for such shielding and walls, as well as proper alignment of the
Site and wiring. Medical Center shall be financially responsible for the
positioning of the Equipment on its foundation at the Site.
Medical Center shall also at its own expense select, purchase and install
all radiation monitoring equipment and devices, safety circuits and radiation
warning signs needed for the Equipment at the Site, according to all applicable
federal, state and local laws, regulations, recommendations or custom.
Upon completion of the Site, Medical Center shall warrant that the Site
will be safe and suitable for its use of the Equipment. Medical Center shall
fully indemnify and hold harmless GKF from any and all loss, liability, damage,
expense or claim (including attorneys' fees) which GKF may suffer and incur and
which relate to the Site, excluding GKF or Elekta's negligence.
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Medical Center shall be liable to GKF for any damage to the Equipment
caused by (a) defects in construction of the Site or defects in the positioning
of the Equipment at the Site; (b) defects arising out of materials or parts
provided, modified or designed by Medical Center with respect to the Site; or
(c) negligent or intentional acts of omission or commission by Medical Center or
any of its officers, agents, physicians, and employees in connection with the
Site preparation or operation of the Equipment at the Site.
Medical Center warrants that it shall utilize its best efforts to fulfill
on an expeditious basis its obligations under this Paragraph 5. Medical Center
further warrants that it shall on a regular basis keep GKF informed of Medical
Center's progress in fulfilling its obligations pursuant to this Paragraph 5.
Should Medical Center not have all site preparations completed by the delivery
date specified by a separate agreement plus a sixty (60) day grace period such
that the site is acceptable for positioning and installation of the equipment,
Medical Center shall reimburse GKF at an interest rate of Bank of America's
prime rate plus 2% on GKF's equipment cost until the site is prepared to allow
positioning and installation of the equipment.
6. Term of the Equipment. GKF agrees to provide to Medical Center the
Equipment pursuant to the terms of this Agreement, for a term of ten (10) years
from the Commencement Date as described in Paragraph 4 hereinabove ( the
"Term"), unless terminated earlier as provided herein.
7. Per Procedure Payments. Medical Center shall schedule use of the
Equipment at its sole discretion and shall be obligated to no minimum number of
procedures. Medical Center shall pay to GKF a per procedure payment of * for
procedures * performed in each year of the Agreement for the use of the
Equipment and * per procedure for procedures * and above during each year of the
Agreement for the use of the Equipment. For purposes of per procedure
calculation, procedure counts are not cumulative and the procedure count reverts
to zero on the "Reset Date" which is one (1) year after the Commencement Date
and each anniversary date thereafter. (A procedure shall be defined as a single
patient treatment session that may include one or more isocenters during that
session. Medical Center shall be billed on the fifteenth (15th) and the last day
of each month for the actual number of procedures performed during the first and
second half of the month, respectively. Medical Center shall pay the procedures
invoiced within thirty (30) days after being invoiced. Interest shall begin to
accrue at the rate of 1-1/2% per month on all invoices remaining unpaid after 45
days.
(a) If the "Reimbursement Rate" in effect on any "Reset Date" is *
greater or less than the "Base Rate," Medical Center shall inform GKF in writing
within sixty (60) days of such increase or decrease and shall provide GKF with
the information used in calculating such Reimbursement Rate. Within thirty (30)
days after GKF's receipt of such notice, the parties shall meet to renegotiate
in good faith the per procedure payments payable by Medical Center for patients
treated under this Agreement with Medicare as their primary insurer.
(b) In determining the renegotiated per procedure payment any
reduction or increase, only for those patients treated who have Medicare as
their primary insurer, thereto may or may not be in proportion to the reduction
or increase to the Reimbursement Rate. Furthermore, any reduction to the per
procedure payment will be calculated to provide Medical Center with Operating
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Income estimated at a break even level as a result in negative Operating Income
to GKF in accordance with subsection (c) below. Medical Center shall permit GKF
to inspect Medical Center's books and records pertaining to the Equipment in
order to verify such Operating Income.
(c) If the per procedure payment for patients treated who have
Medicare as their primary insurer proposed by Medical Center would result in
negative "Operating Income" (as defined below) to GKF, then, GKF shall have no
recourse to arbitration as provided in this Section 7. In such event, this
Agreement shall remain unchanged and in full force and effect. GKF shall permit
Medical Center to inspect GKF's books and records pertaining to the Equipment in
order to verify such Operating Income.
(d) If the per procedure payment proposed by Medical Center would
not result in GKF incurring negative Operating Income, but the parties are
unable to agree in good faith on a renegotiated per procedure payment, then, GKF
and Medical Center shall jointly appoint an arbitrator who shall have not less
than (10) years experience in medical equipment financing, in good standing with
the American Arbitration Association or other comparable organization, and who
shall have no prior relationship, attorney/client or otherwise, with any of the
parties. Such arbitrator shall review the information presented by both parties
and shall render a decision within thirty (30) days of his of her appointment.
In rendering a decision, the arbitrator shall be bound by the guidelines set
forth in this Section, including, without limitation, the parameters for
renegotiated per procedure payments as set forth in subsection (a), (b), (c),
above and this subsection (d). The arbitrator's decision shall be shared equally
between the parties. The foregoing arbitration procedure shall apply only to
disagreements arising from this subsection (d) and not to any other disputes or
disagreements arising from this Agreement.
(e) If the parties mutually agree on a renegotiated per procedure
payment or if a renegotiated per procedure payment is determined by the
arbitrator as set forth above, then such renegotiated per procedure payment
shall become one (1) month after such payment rate is reached, and Section 7
hereto shall be deemed automatically amended as of such date.
(f) Definition of terms: As used herein, (i) the "Reimbursement
Rate" shall mean the average technical component reimbursement received by
Medical Center for the Equipment from all patients treated who have Medicare as
their primary insurer in effect as of any Reset Date; (ii) the "Base Rate" shall
mean the average technical component reimbursement received by Medical Center
for the Equipment from all patients treated who have Medicare as their primary
insurer in effect on the date which is one year after the Commencement Date;
(iii) the "Reset Date" shall mean the date which is two (2) years after the date
of the first procedure and each anniversary date thereafter; and (iv) "Operating
Income" with respect to either party shall mean all technical component revenues
generated by such party from the Equipment less such party's corresponding
direct operating expenses related to the Equipment, including, without
limitation, applicable interest and depreciation expenses on the Equipment and
Site improvements, but excluding physician professional fees and direct or
indirect administrative overhead expenses.
8. Use of the Equipment. The Equipment may be used by Medical Center only
at the location stated above and shall not be removed therefrom. Medical Center
shall not assign or
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sublease the Equipment or its rights hereunder without the prior written consent
of GKF. No permitted assignment or sublease shall relieve Medical Center of any
of its obligations hereunder. Medical Center shall not use nor permit the
Equipment to be used in any manner nor for any purpose for which, in the opinion
of Elekta or GKF, the Equipment is not designed or reasonably suitable. Medical
Center shall not permit any liens, whether voluntary or involuntary, to attach
to the Equipment, without the prior written consent of GKF. Medical Center shall
have no interest in the Equipment other than the rights acquired as a lessee
hereunder and the Equipment shall remain the property of GKF regardless of the
manner in which it may be installed or attached at the Site. Medical Center
shall, at GKF's request, affix to the Equipment tags, decals, or plates
furnished by GKF, indicating GKF's ownership of the Equipment.
9. Additional Covenants of Medical Center. In addition to the other
covenants made by Medical Center, Medical Center shall at its own cost and
expense:
(a) Provide properly trained professional, technical and support
personnel and supplies required for the proper performance of medical procedures
utilizing the Equipment.
(b) Assume all medical and financial responsibility for the overseers'
monitoring of all patients' medical condition and treatment.
(c) Fully comply with all of its obligations under the LGK Agreement.
(d) Indemnify GKF as herein provided: (i) Medical Center hereby agrees to
fully indemnify and/or reimburse (including attorneys' fees) GKF on a prompt
basis for any and all damage to the Equipment (including any violations by
Medical Center, its agents, officers, physicians, employees, successors and
assigns of the Service Agreement described in Paragraph 16 hereof) to the extent
such damages are caused by the negligent or wrongful acts or omissions of
Medical Center, its agents, officers, physicians and employees. In the event the
Equipment is destroyed or rendered unusable, this indemnification shall extend
up to (but not exceed) the market value of the Equipment at the time of its
destruction less salvage, if any. For the purposes of this Agreement "market
value" shall be the value a willing lessee is willing to pay to a willing lessor
for comparable Equipment; however, such value shall be no less than the higher
of GKF's net book value of the Equipment or its principal balance on any loan
for the Equipment. (ii) Medical Center hereby further agrees to indemnify and
hold GKF, its agents, officers, employees, successors and assigns, harmless from
and against any and all claims, liabilities, obligations, losses, damages,
injuries, penalties, actions, costs and expenses (including attorneys' fees) for
all events and/or occurrences described in Article 7.3 of the LGK Agreement to
the same extent that Medical Center agrees to indemnify Elekta thereunder.
Medical Center further agrees to fully indemnify and hold harmless GKF for any
loss, damage, claim, or expense (including attorneys' fees) GKF may suffer or
incur as a result of Medical Center's breach of the LGK Agreement.
(e) Provide reasonable and customary marketing materials developed by
Medical Center (i.e. brochures, announcements, etc.) and reasonable marketing
support from an administrative and physician (i.e. seminars by neurosurgeons and
radiation oncologists to referring physicians, etc.) commitment standpoint for
this clinical service.
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10. Additional Covenants, Representations and Warranties of GKF. In
addition to the other covenants, representations and warranties, made by GKF in
this Agreement:
(a) GKF represents and warrants that GKF has full power and authority to
enter into this Agreement, and that this Agreement does not and will not violate
any agreement, contract or instrument binding upon GKF.
(b) GKF represents and warrants to Medical Center that, upon delivery of
the Equipment to Medical Center, GKF shall use its best faith efforts to require
that Elekta meets its contractual obligations to GKF and in putting the
Equipment, as soon as 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.
(c) GKF represents and warrants that throughout the term of this
Agreement, Medical Center shall 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 or under Elekta's Purchase Agreement with GKF.
(d) During the entire term of this agreement and subsequent extension
thereof, GKF shall maintain in full force and effect: (i) the Service Agreement
referenced in Paragraph 16 hereof; and (ii) any other service or other
agreements required to fulfill GKF's obligations to Medical Center pursuant to
this Paragraph 10(d). GKF represents and warrants that during the entire term of
this agreement and any subsequent extensions thereof, that it will fully pursue
any and all remedies it may have against Elekta under the Service Agreement to
insure that the Equipment will be in conformity with Elekta's warranties so that
it is free from defects in design, materials, and workmanship which result in
noncompliance with the specifications and/or Elekta's warranties to GKF. In no
event, however, shall the warranty obligations of GKF to Medical Center with
respect to the Equipment be greater or more extensive than Elekta's warranty
obligations to GKF with respect to the Equipment.
(e) GKF represents and warrants that it shall pay the tuition costs of
training four (4) of Medical Center's initial core group personnel on the
Equipment. Travel and entertainment costs for such personnel are borne by
Medical Center.
11. Ownership/Title. It is expressly understood that Medical Center shall
acquire no right, title or interest in or to the Equipment, other than the right
to the possession and use of the same in accordance with the terms of this
Agreement.
GKF may at its sole discretion finance the Equipment. Financing may be in
the form of an installment loan or a capitalized lease or other commercially
available debt instrument. Should GKF finance the Equipment through an
installment loan, GKF shall be required to provide the Equipment as collateral
against the loan. Should GKF finance the Equipment through a capitalized lease
title shall vest with the lessor until GKF exercises its buy-out option. In
addition, should GKF finance the Equipment, said Agreement may be used as
collateral against the loan.
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12. Cost of Use of the Equipment. Except as is otherwise provided herein,
Medical Center shall bear the entire cost of using the Equipment during the Term
of this Agreement. This shall include, but not be limited to, providing trained
professionals, technical and support personnel and supplies to properly operate
the Equipment. Medical Center shall be fully responsible and liable for all acts
and/or omissions of such professional, technical and support personnel.
13. Taxes. GKF shall pay any personal property taxes levied against the
Equipment and any other taxes or governmental fees or assessments, however
denoted, whether of the federal government, any state government or any local
government, levied or based on this Agreement or the use of the Equipment except
for those taxes, if any, pertaining to the gross income or gross receipts of
Medical Center.
14. Maintenance and Inspections. GKF agrees to exercise due and proper
care in the maintenance of the Equipment and to keep the Equipment in a good
state of repair, reasonable wear and tear excepted. Medical Center shall be
liable to GKF for all damage to the Equipment caused by the misuse, negligence,
improper use or other intentional or negligent acts or omissions of Medical
Center's employees, officers, agents, and physicians.
GKF (and Elekta) shall have the right of access to the Equipment for the
purpose of inspecting same at all reasonable times and upon reasonable notice
and with a minimum of interference to Medical Center's operations. In the event
the Equipment is improperly used by Medical Center or its employees, agents,
officers, and physicians, GKF may service or repair the same as needed and such
expense shall be paid by Medical Center, unless the repair is covered by the
Service Agreement described in Paragraph 15 hereof.
Any work so performed by or in the service or maintenance of the
Equipment as a result of Medical Center's failure or neglect to do so shall not
deprive GKF of any of its rights, remedies or actions against Medical Center for
damages caused by such failure or neglect.
15. Equipment Modifications/Additions/Upgrades. The parties agree that
the necessity and financial responsibility for modifications/additions/upgrades
to the Equipment, including the reloading of the Cobalt-60 source, shall be the
responsibility of GKF, at its expense, as long as the transaction contemplated
herein is economically feasible to GKF.
16. Service Agreement. GKF warrants that it shall simultaneously with the
execution of this Agreement enter into a Service Agreement with Elekta.
17. Termination If, after the initial twenty-four (24) month period of
service, and subsequent 12 month periods of service, Medical Center does not
provide GKF with a reasonable economic justification to continue providing Gamma
Knife services hereunder, then and in that event, GKF shall have the option of
terminating this Agreement upon the giving of written notice to Medical Center
of said termination not less than ninety (90) days prior to GKF's designated
termination date.
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18. Options to Extend Agreement.
(a) Medical Center shall have the option at the end of the ten (10) year
initial Term to:
(i) Renegotiate this Agreement for a five (5) year renewal term.
(ii) Terminate this Agreement. If Medical Center terminates this
Agreement at the end of the initial term, GKF shall remove the Gamma Knife
within an agreed upon period of time after the expiration of the ten (10) year
initial Term.
Medical Center shall exercise one (1) of the two (2) options
referred to above, by mailing an irrevocable written notice thereof to GKF at
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, by
registered mail, postmarked on or before the end of the ninth (9th) year of the
ten (10) year initial Term of this Agreement. Any such notice shall be
sufficient if it states in substance that Medical Center elects to exercise its
option and states which of the two (2) options referred to above Medical Center
is exercising.
19. No Warranties by GKF. Medical Center warrants that as of the
Commencement Date, it shall have (a) thoroughly inspected the Equipment; (b)
determined for itself that all items of the Equipment are of a size, design,
capacity and manufacture selected by it; and (c) satisfied itself that to the
best of its knowledge the Equipment is suitable for Medical Center's stated
purposes. GKF SUPPLIES THE EQUIPMENT "AS IS" AND 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, DESIGN, CONDITION, DURABILITY, CAPACITY, MATERIAL OR
WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE, it being agreed that all
such risks as between GKF and Medical Center, shall be borne by Medical Center.
Medical Center agrees to look solely to the manufacturer (Elekta) or to
suppliers of the Equipment (and its software) for any and all warranty claims.
Any and all warranties made by Elekta will be in its good faith best efforts
enforced by GKF on behalf of Medical Center during the ten (10) year initial
Term hereof. Medical Center agrees that GKF shall not be responsible for the
delivery, installation, or operation of the Equipment or for any delay or
inadequacy of any or all of the foregoing. GKF shall not be responsible for any
direct or indirect consequential loss or damage resulting from the installation,
operation or use of the Equipment or otherwise. Medical Center 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. Notwithstanding anything to the contrary set forth
above, GKF warrants that the Equipment meets the specifications set forth in the
LGK Agreement.
20. Events of Default and Remedies. The occurrence of any one of the
following shall constitute an Event of Default hereunder:
(a) Medical Center fails to pay any installment of semi-monthly
procedure payments when due when such default continues for a period of thirty
(30) days after notice thereof
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from GKF or its assignee is given to Medical Center, unless Medical Center
disputes the installment payment, such as, without limitation, an incomplete
procedure due to faulty Equipment.
(b) Medical Center attempts to remove, sell, transfer, encumber,
sublet or part with possession of the Equipment or any items thereof, except as
expressly permitted herein;
(c) Either party shall fail to observe or perform any of the other
obligations required to be observed or performed by such party hereunder and
such failure shall continue uncured for twenty (20) days after written notice
thereof to the defaulting party by the other party;
(d) Either party 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.
(e) Within sixty (60) days after the commencement of any
proceedings against either party 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 such
party's 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.
(f) Upon the occurrence of an Event of Default by Medical Center,
GKF may at its option do any or all of the following: (i) by notice to Medical
Center, terminate this Agreement as to the Equipment in default, wherever
situated, and for such purposes, enter upon the Site without liability for so
doing or GKF may cause Medical Center and Medical Center hereby agrees to return
the Equipment to GKF at Medical Center's sole cost and expense; (ii) recover
from, as liquidated damages for the loss of the bargain and not as a penalty, an
amount equal to the present value of the unpaid estimated future lease payments
by Medical Center to GKF through the end of the Agreement term discounted at the
rate of nine percent (9%), which payment shall become immediately due and
payable. Unpaid estimated future lease payments shall be based on the prior 12
months lease payments with an annual five (5%) percent increase; (iii) sell,
dispose of, hold, use or lease the Equipment in default, as GKF in its sole
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). In any event,
Medical Center shall, without further demand, pay to GKF an amount equal to all
sums due and payable for all periods up to and including the date on which GKF
had declared this Agreement to be in default.
(g) In the event, that Medical Center shall have paid to GKF the
liquidated damages referred to in (iii) above, GKF hereby agrees to pay to
Medical Center promptly after
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receipt thereof, all rentals or proceeds received from the reletting or sale of
the Equipment during the balance of the ten (10) year initial Term (after
deduction of all expenses incurred by GKF; said amount never to exceed the
amount of the liquidated damages paid by Medical Center). Medical Center agrees
that GKF shall have no obligation to sell the Equipment. Medical Center shall in
any event remain fully liable for reasonable damages as provided by law 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. Medical Center
hereby agrees that, in any event, it shall be liable for any deficiency after
any sale, lease or other disposition of the Equipment by GKF. The rights
afforded GKF hereunder shall not be deemed to be exclusive, but shall be in
addition to any other rights or remedies provided by law.
(h) Upon occurrence of an Event of Default by GKF, the Medical
Center shall be entitled to liquidated damages for losses of the bargain and not
as a penalty in an amount equal to the cost of the leasehold provided by the
Medical Center. GKF shall remain fully liable for reasonable damages as provided
by law for all costs and expenses incurred by the Medical Center on account of
such default, including but not limited, to all court costs and reasonable
attorneys' fees. The rights afforded the Medical Center hereunder shall not be
deemed to be exclusive, but shall be in addition to any other rights or remedies
provided by law.
21. Insurance.
(a) Medical Center shall, at its own cost and expense, require
that its Equipment moving, installation and similar contractor(s) (such as
rigger, general contractor, etc.) and any sub-contractors thereof (together
"contractor(s)"), have in effect , at all times while the Equipment is in such
contractors' care, custody and control and throughout the course of
construction, all risk and hazard insurance coverage. Such insurance coverage
shall name GKF and such additional parties as GKF shall designate as Additional
Named Insureds. Such insurance coverage shall be for an amount not less than the
replacement cost of the Equipment. Medical Center shall further require that
such contractor(s) provide a Certificate of Insurance for the coverage required
herein to GKF and its designees, if any, prior to the date any such contractor
commences activity subject to the requirements of this Section 21(a). Such
Certificate(s) of Insurance shall include a provision for thirty (30) days
advance notice prior to cancellation or termination of the coverage evidenced
thereby.
(b) During the ten (10) year initial Term of this Agreement (and
any successive terms) GKF shall, at its own cost and expense, keep in effect an
all risk and hazard insurance policy covering the Equipment. The all risk and
hazard insurance policy shall be for an amount not less than the replacement
cost of the Equipment. During the ten (10) year initial Term of this Agreement,
Medical Center shall, at its own cost and expense keep in effect public
liability and professional liability insurance policies concerning the operation
of the Equipment by Medical Center. Said policies shall be in the amounts of not
less than $1,000,000 per occurrence and $3,000,000 in aggregate per year.
Evidence of such insurance coverages shall be furnished by both parties to the
other party upon written request, by no later than the Commencement Date.
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(b) If the Equipment is rendered unusable as a result of any
physical damage to, or destruction of, the Equipment, Medical Center shall give
to GKF immediate notice. GKF shall determine, within thirty (30) days after the
date of occurrence of such damage or destruction, whether the Equipment can be
repaired. In the event GKF determines that the Equipment cannot be repaired, GKF
at its sole cost and expense shall promptly replace the Equipment. 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 promptly repaired.
22. Notices. Any notices required under this Agreement shall be sent in
writing and shall be deemed to have been duly given if delivered by hand or
mailed by certified or registered mail to the following addresses:
To GKF: Chief Executive Officer
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
To Medical Center: Xxxxx Xxxxxxx
Administrator
Saint Xxxxxxx Medical Center
000 X.X. Xxxx Xxx Xxxxxx
Xxxxxx, XX 00000
Or to such other addresses as either party may specify for the reception of
notice from time to time in writing to the other party. Any such notice shall be
effective only when actually received by the party to whom addressed.
23. Integration. This Agreement contains the full and entire Agreement
between the parties hereto, and no oral or written understanding is of any force
or effect whatsoever unless expressly contained in a writing executed subsequent
to the date of this Agreement.
24. Waivers. To the extent that one party fails or chooses not to pursue
any of its remedies under this Agreement or pursuant to applicable law, such
shall not prejudice such party's rights to pursue any of those remedies at any
future time and shall not constitute a waiver of such party's rights.
25. Assignments. This Agreement is binding upon and shall inure to the
benefit of the permitted successors or assigns of the respective parties hereto,
except that neither party may assign its rights or obligations under this
Agreement without the express written consent of the other (which consent shall
not be unreasonably withheld).
26. Amendments. This Agreement shall not be amended or altered in any
manner unless such amendment or alteration is in a writing signed by both
parties.
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27. Record-Keeping Requirements. To the extent required by the
regulations promulgated by the Health Care Financing Administration pursuant to
Section 952 of the Omnibus Reconciliation Act of 1980, GKF shall:
(a) Until the expiration of four (4) years following the
furnishing of services pursuant to this Agreement, GKF agrees to make available
upon written request of the Secretary of Health and Human Services or the U.S.
Comptroller General or any of their duly authorized representatives, this
Agreement, any books, documents and records necessary to verify the nature and
extent of costs incurred by Medical Center by reason of the activities of GKF
under this Agreement; and
(b) If GKF elects to delegate any of its duties under this
Agreement (which have a cost or value of Ten Thousand Dollars ($10,000.00) or
more over a twelve (12) month period) to a related organization, GKF may do so
only through a subcontractor which is consented to by Medical Center, it being
understood that, inasmuch as Medical Center is entering into this Agreement in
reliance on GKF's reputation and expertise, that Medical Center shall be the
sole judge of the reputation and expertise of the proposed delegee, and only
through a subcontractor which provides that, until the expiration of four (4)
years following the furnishing of services under such subcontract, the related
organization shall make available, on request of the Secretary of Health and
Human Services or the U.S. Comptroller General or any of their authorized
representatives, the subcontract, and books, documents and records of the nature
and extent of costs incurred by Medical Center by reason of activities of such
related organization under such subcontract. No delegation by GKF of its duties
hereunder shall relieve GKF from liability hereunder.
28. Miscellaneous Provisions.
(a) The invalidity or unenforceability of any portion or provision
of this Agreement shall not effect the validity or enforceability of any other
portion, nor shall either party's implied or express consent to the breach or
waiver of any provision of this Agreement constitute a waiver of such provision
as to any subsequent breach.
(b) In the event of any claim or controversy arising hereunder,
the prevailing party in such claim or controversy shall be entitled to a
reasonable attorneys' fee in addition to whatever other relief said party would
be otherwise entitled.
(c) 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.
IN WITNESS WHEREOF, the parties have signed this Agreement on the day and
year first above written.
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MEDICAL CENTER: GKF:
OSF HEALTHCARE SYSTEM, GK FINANCING, LLC
an Illinois not-for-profit corporation, a California limited liability company
owner and operator of Saint Xxxxxxx
Medical Center
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
------------------ -------------------
Xxxxx X. Xxxxx, CEO Xxxxx X. Xxxxxx
Chief Executive Officer
Dated: February 4, 2000 Dated: February 18, 2000
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