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PURCHASED SERVICES AGREEMENT

Consulting Services Agreement

PURCHASED SERVICES AGREEMENT | Document Parties: AMERICAN SHARED HOSPITAL SERVICES | Elekta Instruments, Inc | GK FINANCING, LLC You are currently viewing:
This Consulting Services Agreement involves

AMERICAN SHARED HOSPITAL SERVICES | Elekta Instruments, Inc | GK FINANCING, LLC

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Title: PURCHASED SERVICES AGREEMENT
Date: 8/14/2009
Industry: Healthcare Facilities     Sector: Healthcare

PURCHASED SERVICES AGREEMENT, Parties: american shared hospital services , elekta instruments  inc , gk financing  llc
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Exhibit10.21a

PURCHASED SERVICES AGREEMENT

      THIS PURCHASED SERVICES AGREEMENT (“Agreement”) is made and entered into as of November 19 2008, by and between GK FINANCING, LLC, a California limited liability company (“GKF”), or its wholly owned subsidiary whose obligation under this agreement shall be guaranteed by GKF, and KETTERING MEDICAL CENTER, an Ohio non-profit corporation, (“Medical Center”), with reference to the following facts:

RECITALS

     WHEREAS, Medical Center wants to obtain the right to use a Leksell Gamma Knife Perfexion (the “Equipment”), manufactured by Elekta Instruments, Inc., a Georgia corporation (“Elekta”), which will replace the existing Leksell Stereotactic Gamma Unit, model B (the “Model B”), currently being used by Medical Center; and

     WHEREAS, GKF is willing to provide Medical Center with the right to use the Equipment which GKF has acquired from Elekta, pursuant to the terms and conditions of this Agreement.

AGREEMENT

      NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth herein, and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Right to Use the Equipment. Subject to and in accordance with the covenants and conditions set forth in this Agreement, GKF hereby grants the right to use the Equipment to Medical Center, and Medical Center hereby accepts the right to use the Equipment from GKF. The Equipment to be placed at the Medical Center pursuant to this Agreement shall include the Gamma Knife technology as specified in Exhibit 1, including all hardware and software related thereto.

     2. LGK Agreement. Simultaneously with the execution of this Agreement, Medical Center and Elekta shall enter into that certain Leksell Gamma Knife End User Agreement pertaining to the Equipment (the “LGK Agreement”), a copy of which is attached hereto as Exhibit 2. Medical Center shall perform, satisfy and fulfill all of its obligations arising under the LGK Agreement when and as required thereunder. Medical Center acknowledges that GKF is a third party beneficiary of the LGK Agreement and, in that capacity, GKF shall be entitled to enforce Medical Center’s performance, satisfaction and fulfillment of its obligations thereunder.

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     3. Term of the Agreement. The initial term of this Agreement (the “Term”) shall commence as of the date hereof and, unless earlier terminated or extended in accordance with the provisions of this Agreement, shall continue for a period of seven (7) years following the date of the performance of the first clinical Procedure (as defined in Section 8) performed on the Equipment (the “First Procedure Date”) at the Site (as defined in Section 5.1). The parties agree to amend this Agreement to memorialize the First Procedure Date upon the performance of the first clinical Procedure performed on the Equipment. Medical Center’s obligation to make the “Purchased Services Payments” to GKF for the Equipment described in Section 8 below shall commence as of the First Procedure Date.

     4. User License. Medical Center shall apply for and use its reasonable efforts to obtain in a timely manner a User License from the Nuclear Regulatory Commission and, if necessary, from the applicable state agency authorizing it to take possession of and maintain the Cobalt supply required in connection with the use of the Equipment during the term of this Agreement. Medical Center also shall apply for and use its reasonable efforts to obtain in a timely manner all other licenses, permits, approvals, consents and authorizations which may be required by state or local governmental or other regulatory agencies for the development, construction and preparation of the Site, the charging of the Equipment with its Cobalt supply, the conduct of acceptance tests with respect to the Equipment, and the use of the Equipment during the Term, as more fully set forth in Article 2.1 of the LGK Agreement. GKF shall provide assistance to the Medical Center in applying for and for obtaining all such licenses, permits, approvals, consents or authorizations. If the applicable regulatory authorities affirmatively decline to issue a required license, permit, approval, consent or authorization notwithstanding Medical Center’s best efforts to obtain the same, all parties shall be released from further performance or any obligations or duties arising under this Agreement.

     5. Delivery of Equipment; Site.

          5.1 GKF shall coordinate with Elekta and Medical Center to have the Equipment delivered to Medical Center at the site at which the Model B is currently located, as described in Exhibit 5.1 of this Agreement (the “Site”), which delivery is anticipated to be on or before July 2009, subject to all approvals and User Licenses having been obtained, and provided that, if such delivery date is in advance of the expiration of the current term of the existing Lease Agreement For A Gamma Knife Unit dated June 1, 1998, between GKF and Medical Center (as amended, the “Prior Agreement”), which results in an early termination of the Prior Agreement, then, the parties will negotiate an extension to the Term of this Agreement to offset the effect of such early termination of the Prior Agreement. GKF makes no representations or warranties, and assumes no responsibility or liability, concerning delivery of the Equipment to the Site or the actual date thereof. Medical Center shall bear no risk of loss prior to actual delivery of Equipment to the Site.

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          5.2 Medical Center shall provide access to the Site for the Equipment. GKF at its cost and expense shall prepare the Site for the Equipment in accordance with Elekta’s guidelines, specifications, technical instructions and site planning criteria (which site planning criteria are attached as Exhibit 5.2 of this Agreement) (collectively the “Site Planning Criteria”). The location of the Site has been agreed upon by Medical Center and GKF as described in Exhibit 5.1 of this Agreement.

     6. Site Preparation, Deinstallation of Model B and Installation of Equipment.

          6.1 GKF, at its cost, expense and risk, shall prepare all plans and specifications required to construct and improve the Site for the installation, use and operation of the Equipment during the Term. The plans and specifications shall comply in all respects with the Site Planning Criteria and with all applicable federal, state and local laws, rules and regulations. All plans and specifications prepared by or on behalf of GKF (and all material changes thereto following approval by Medical Center and Elekta) shall be subject to the written approval of Medical Center and Elekta prior to commencement of construction at the Site. GKF shall provide Medical Center and Elekta with a reasonable period of time for the review and consideration of all plans and specifications following the submission thereof for approval (and Medical Center shall not unreasonably withhold or delay its approval). Following approval of the plans and specifications by Medical Center and Elekta, GKF, at its cost and expense, shall assist Medical Center in obtaining all permits, certifications, approvals or authorizations required by applicable federal, state or local laws, rules or regulations necessary to construct and improve the Site for the installation, use and operation of the Equipment.

          6.2 Based upon the plans and specifications approved by Medical Center and Elekta, GKF, at its cost, expense and risk, shall prepare, construct and improve the Site as necessary for the installation, use and operation of the Equipment during the Term, including, without limitation, providing all temporary or permanent shielding required for the charging of the Equipment with the Cobalt supply and for its subsequent use, selecting and constructing a proper foundation for the Equipment and the temporary or permanent shielding, aligning the Site for the Equipment, and installing all electrical systems and other wiring required for the Equipment. In connection with the construction of the Site, GKF, at its cost and expense, shall select, purchase and install all radiation monitoring equipment, devices, safety circuits and radiation warning signs required, if any, at the Site in connection with the use and operation of the Equipment, all in accordance with applicable federal, state and local laws, rules, regulations or custom.

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          6.3 GKF, at its cost, expense and risk, shall be responsible for the installation of the Equipment at the Site, including the positioning of the Equipment on its foundation at the Site in compliance with the Site Planning Criteria.

          6.4 GKF warrants and ensures that, to its best knowledge, upon completion of the preparation, construction and improvement of the Site, including the positioning of the Equipment on its foundation at the Site and installation of the Equipment, the Site shall comply in all material respects with the Site Planning Criteria and all applicable federal, state and local laws, rules and regulations, and be safe and suitable for the ongoing use and operation of the Equipment during the Term. GKF agrees to indemnify, defend and hold Medical Center harmless from any loss, or claim, suit or proceeding brought against the Medical Center in connection with or arising from GKF’s noncompliance with GKF’s warranties and assurances provided under this Section 6.4. It is acknowledged that the existing site and location that are currently being used for the Model B pursuant to the Prior Agreement (the “Existing Site”) will continue to be used for the Equipment following the deinstallation and removal of the Model B and GKF’s modifications to the Site to accommodate the Equipment. Notwithstanding anything to the contrary contained in this Agreement, (a) nothing set forth in this Agreement shall eliminate, modify or limit any or all of Medical Center’s representations, warranties and/or obligations set forth in the Prior Agreement with respect to the Existing Site, all of which shall remain unchanged and in full force and effect, and shall survive the termination or expiration of the Prior Agreement; and (b) GKF makes no representation or warranty and assumes no liabilities with respect to the work performed by or on behalf of Medical Center pursuant to the Prior Agreement in connection with the Existing Site.

          6.5 GKF at its cost, expense and risk, shall coordinate with Elekta the deinstallation and removal of the Model B including unloading and disposing of the cobalt. GKF agrees to provide Medical Center the option to retain its existing headframes and fiducial boxes; and in the event that Medical Center exercises this option, GKF also agrees that it shall, at its sole cost and expense, refurbish the existing headframes.

          6.6 GKF shall use its reasonable efforts to satisfy its obligations under this Section 6 in a timely manner. GKF shall keep Medical Center informed on a regular basis of its progress in the design of the Site, the preparation of plans and specifications, the construction and improvement of the Site, and the satisfaction of its other obligations under this Section 6. In all events, GKF shall complete all construction and improvement of the Site required for the installation, positioning and testing of the Equipment on or prior to the delivery date described in Section 5.1 above. During the Term, Medical Center, at its cost and expense, shall maintain the Site in a good working order, condition and repair, reasonable wear and tear excepted.

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          6.7 Notwithstanding anything to the contrary contained in this Agreement, GKF’s responsibility for all costs and expenses incurred in connection with Section 6.1, 6.2, and 6.3 shall not exceed * in the aggregate. All costs and expenses in excess of * shall be the responsibility of Medical Center.

     7. Marketing Support. GKF, in coordination with Medical Center, shall provide Medical Center with marketing support for the service to be provided by Medical Center using the Equipment. Not less than ninety (90) days prior to the First Procedure Date and the commencement of each succeeding twelve (12) month period during the Term, GKF and Medical Center shall develop a mutually agreed upon marketing budget and plan (“Plan”) for the clinical service to be supported by the Equipment for the succeeding twelve (12) month period of the Term. Once approved, the Plan shall be implemented by Medical Center in accordance with its terms. If Medical Center has not approved or disapproved of the Plan within sixty (60) days following its receipt, Medical Center shall be deemed to have approved the same. All advertisements, brochures and other marketing materials pertaining to the Plan shall be subject to review and written approval by Medical Center and GKF prior to their use. Medical Center and GKF shall discuss the Plan on a regular basis not less than once per quarter. Medical Center’s and any Medical Center subsidiary’s or related corporation’s name, trademarks, service marks, or other identifying names, marks, images or designations shall be and remain the sole and exclusive property of Medical Center, but which may be used in any written pre-approved marketing materials without payment of any license or royalty fee. As funds are expended by Medical Center in accordance with the Plan, Medical Center shall submit invoices (together with documentary evidence supporting the invoices) for its expenditures paid to third parties and, promptly following the receipt of such invoices, GKF shall reimburse Medical Center for * of approved expenditures, provided that such portion to be reimbursed by GKF shall not exceed an average of * annually during the term of the Agreement. It is acknowledged by the parties that such expenses to be reimbursed by GKF as provided in Section 7 have been included in GKF’s calculation of Medical Center’s Purchased Services Payments so as to allow GKF to recover such GKF expenses during the Term of this Agreement.

     8. Purchased Services Payments.

          (a) The parties have negotiated this Agreement at arm’s length based upon reasonable and jointly derived assumptions regarding the capacity for clinical services available from the Equipment, Medical Center’s capabilities in providing high quality radiation oncology services, market dynamics, GKF’s risk in providing the Equipment, and the provision to GKF of a reasonable rate of return on its investment in support of the Equipment. Based thereon, the Parties believe that the “Purchased Services Payments” as defined below represent fair market value for the use of the Equipment, the deinstallation and removal of the Model B, the preparation, construction and improvement of the Site, and the marketing support and other services to be provided

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by GKF to Medical Center hereunder. Medical Center undertakes no obligation to perform any minimum number of Procedures on the Equipment, and the use of the Equipment for the performance of Procedures is wholly based upon the independent judgment of physicians who order such Procedures to meet the medical needs of their patients.

          (b) In consideration for and as compensation to GKF for deinstallation and removal of the Model B, the preparation, construction and improvement of the Site, installation and use of the Equipment, the Equipment modification allowance referenced in Section 13.1 below, and marketing support and the other additional services to be provided by GKF under this Agreement, Medical Center shall pay to GKF, on a monthly basis, the applicable “Purchased Services Payments” (as defined below) for each “Procedure” that is performed by Medical Center or its representatives or affiliates, whether on an inpatient or outpatient basis, and irrespective of whether the Procedure is performed on the Equipment or using any other equipment or devices, including but not limited to any “Additional GK Leksell Unit” (defined below). Notwithstanding the foregoing, and for the avoidance of doubt, if at any time in addition to the Equipment, Medical Center purchases, leases or otherwise acquires from any third party the use of a Leksell Gamma Knife unit(s) of any model type or configuration (an “Additional GK Leksell Unit”), then, in addition to the Purchased Services Payments that are payable to GKF for Procedures performed using the Equipment as set forth above, Medical Center shall pay to GKF the Purchased Services Payments on a monthly basis for any and all Procedures performed using the Additional GK Leksell Unit, and/or any other equipment or devices, whether on an inpatient or outpatient basis. The parties acknowledge that the Purchased Services Payments represent fair market value for the use of the Equipment as described in this Agreement. As used herein:

               (i) “Procedure” means any treatment that involves stereotactic, external, single fraction, conformal radiation, commonly called radiosurgery, that may include one or more isocenters during the patient treatment session, delivered to any site(s) superior to the foramen magnum. “Procedure” shall expressly exclude (1) any procedures which the Equipment is unable to perform or which, in the opinion of Elekta, the Equipment is not designed or reasonably suitable to perform; and/or (2) any fractionated procedures for a single tumor involving more than a single fraction (commonly called fractionated stereotactic radiotherapy) where such fractionated treatment is medically indicated.

               (ii) “Purchased Services Payments” shall be equal to the applicable percentage of the “Technical Component Collections” relating to each Procedure as set forth in Exhibit 8 attached hereto performed using the Equipment, any Additional GK Leksell Unit and/or any other equipment or devices during the Term of this Agreement.

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               (iii) “Technical Component Collections” means the total amount actually collected by Medical Center or its representatives or affiliates during each month from any and all payor sources, including, without limitation, patients, insurance companies, state or federal government programs or any other third party payors, including, without limitation, all copayments and deductibles, as reimbursement for the technical component of all services (including, but not limited to, treatment planning and delivery, imaging, medical supplies, pharmacy, laboratory, and recovery room) pertaining to each Procedure performed on the Equipment, any Additional GK Leksell Unit and/or any other equipment or devices during the term of this Agreement. The technical fees to be billed for each Procedure (on an individual basis and not collectively) that is performed utilizing the Equipment, any Additional GK Leksell Unit and/or any other equipment or devices during the Term of this Agreement shall be an amount which is economically justifiable based upon GKF’s direct operating expenses and its total project costs, together with a return thereon. For all Procedures that are performed utilizing the Equipment, any Additional GK Leksell Unit and/or any other equipment or devices, Medical Center shall consult in advance with GKF from time to time regarding the amount of such technical fees to be billed by Medical Center. Subject to compliance with the standard described in the preceding sentence, Medical Center and GKF shall mutually agree on the setting or revision of the amount of, or portion comprising, such technical fees on no more than an annual basis to ensure that such fees remain consistent with fair market value, and the acceptance of the technical fee component amounts with third party payors prior to their implementation.

          (c) On or before the fifteenth (15) day and the last day of each month (or portion thereof) during the term of this Agreement, Medical Center shall inform GKF in writing as to (i) the number of Procedures performed during that month utilizing the Equipment (and, if applicable, any Additional GK Leksell Unit and/or any other equipment or devices); and (ii) the Technical Component Collections during that month. Medical Center shall submit claims for reimbursement to the appropriate payors for each Procedure within thirty (30) days after the patient receiving the treatment is discharged. If no Technical Component Collections are received during any month, then, no Purchased Services Payments shall be owing by Medical Center to GKF for that month. During the Term of this Agreement, Medical Center shall, by the thirtieth (30th) day of each month, remit GKF’s aggregate Purchased Services Payment for the immediately preceding month, and, for a period of twenty-five (25) months following the termination or expiration of this Agreement (the “Collections Run-Out Period”), Medical Center shall, by the thirtieth (30th) day of each such month, continue to remit GKF’s aggregate Purchased Services Payment pertaining to Technical Component Collections received during the Collections Run-Out Period as applicable to Procedures performed during the Term. All or any portion of a Purchased Services Payment which is not paid in full within sixty (60) days after its due date shall bear interest at the rate of one percent (1%) per month (or the maximum monthly interest rate permitted to be charged by law

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between an unrelated, commercial borrower and lender, if less) until the unpaid Purchased Services Payment together with all accrued interest thereon is paid in full. If GKF shall at any time accept a Purchased Services Payment from Medical Center after it shall become due, such acceptance shall not constitute or be construed as a waiver of any or all of GKF’s rights under this Agreement, including the rights of GKF set forth in Section 20 hereof.

          (d) Within thirty (30) days after the close of each month, Medical Center shall provide GKF with a patient de-identified written report indicating the status of billings and collections for each Procedure performed during that month using the Equipment, any Additional GK Leksell Unit and/or any other equipment or devices, including, without limitation, the amount of the claim submitted and the amount received for each such Procedure. Upon request by GKF, Medical Center shall furnish to GKF information regarding reimbursement rates from any or all payor sources for Procedures (applicable to procedures performed either on an inpatient or outpatient basis). If such reimbursement rates should change at any time or from time to time after the date hereof, in each instance, Medical Center shall provide written notice thereof to GKF within five (5) days of Medical Center receiving notice thereof.

          (e) Within ten (10) days after Medical Center’s receipt of written request by GKF, GKF shall have the right to audit all applicable books and records during normal business hours to verify the number of Procedures performed and Technical Component Collections received by Medical Center or its agents, representatives or affiliates, utilizing the Equipment, any Additional GK Leksell Unit and/or any other equipment or devices, and Medical Center shall provide GKF (or cause GKF to be provided) with access to such books and records; provided that any patient names or identifiers or other confidential and Protected Health Information (as defined and required by state and federal law) shall not be disclosed.

          (f) The provisions of this Section 8 shall survive the termination or expiration of this Agreement.

     9. Use of the Equipment.

          9.1 The Equipment shall be used by Medical Center only at the Site and shall not be removed therefrom. Medical Center shall use the Equipment only in the regular and ordinary course of Medical Center’s business operations and only within the capacity of the Equipment as determined by Elekta’s specifications. Medical Center shall not use nor permit the Equipment to be used in any manner nor for any purpose which, in the opinion of Elekta or GKF, the Equipment is not designed or reasonably suitable.

          9.2 Notwithstanding anything to the contrary contained in this Agreement, this is an agreement of purchasing a service only. Nothing herein shall be construed as conveying to Medical Center any right, title or interest in or to the

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Equipment, except for the express right to use the Equipment granted herein to Medical Center during the Term. All Equipment shall remain personal property (even though said Equipment may hereafter become attached or affixed to real property) and the title thereto shall at all times remain exclusively in GKF.

          9.3 During the Term, upon the request of GKF, Medical Center shall promptly affix to the Equipment an identifying label supplied by GKF indicating GKF’s ownership of the Equipment, and shall keep the same affixed for the entire Term. Medical Center hereby authorizes GKF to cause this Agreement or any statement or other instrument showing the interest of GKF in the Equipment to be filed or recorded, or refiled or re-recorded, with all governmental agencies considered appropriate by GKF. Medical Center also shall promptly execute and deliver, or cause to be executed and delivered, to GKF any statement or instrument reasonably requested by GKF for the purpose of evidencing GKF’s interest in the Equipment, including UCC financing statements and other relevant statements and waivers with respect to rights in the Equipment from any owners or mortgagees of any real estate where the Equipment may be located.

          9.4 At Medical Center’s cost and expense, Medical Center shall (a) protect and defend GKF’s ownership of and title to the Equipment from and against all persons claiming against or through Medical Center, (b) at all times keep the Equipment free from any and all liens, encumbrances, attachments, levies, executions, burdens, charges or legal processes imposed against Medical Center, (c) give GKF immediate written notice of any matter described in clause (b), and (d) in the manner described in Section 22 below indemnify GKF harmless from and against any loss, cost or expense (including reasonable attorneys’ fees) with respect to any of the foregoing.

     10. Additional Covenants of Medical Center. In addition to the other covenants of Medical Center contained in this Agreement, Medical Center shall, at its cost and expense:

          10.1 Provide properly trained professional, technical and support personnel and supplies required for the proper performance of Gamma Knife procedures utilizing the Equipment. In this regard, Medical Center shall make reasonable efforts to maintain on staff a minimum of two (2) Gamma Knife trained teams comprised of neurosurgeons, radiation oncologists and physicists. The Gamma Knife shall be available for use by all credentialed neurosurgeons, radiation oncologists and physicists.

          10.2 Direct, supervise and administer the provision of all services relating to the performance of Procedures utilizing the Equipment in accordance with all applicable laws, rules and regulations.

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          10.3 Provide reasonable and customary marketing materials (i.e. brochures, announcements, etc.) together with administrative and physician support (e.g., seminars for physicians by neurosurgeons and radiation therapists, in accordance with Medical Center’s policies and procedures, etc.) for the Equipment to be operated by the Medical Center. The obligation to provide marketing materials and administration and physician support shall be included in, and not in addition to, the annual marketing budget referenced in Section 7 above.

          10.4 Keep and maintain the Equipment and the Site fully protected, secure and free from unauthorized access or use by any person to the extent that Medical Center provides security for its other radiation oncology services.

          10.5 Operate a fully functional radiation therapy department at the Site or Affiliate site which shall include the Equipment.

     11. Additional Covenants of GKF. In addition to the other covenants of GKF contained in this Agreement, GKF, at its cost and expense, shall:

          11.1 Use its best efforts to require Elekta to meets its contractual obligations to GKF and Medical Center upon delivery of the Equipment and put the Equipment, as soon as reasonably possible, into good, safe and serviceable condition and fit for its intended use in accordance with the manufacturer’s specifications, guidelines and field modification instructions.

          11.2 Cause Medical Center to enjoy the use of the Equipment, free of the rights of any other persons except for those rights reserved by GKF or granted to Elekta under the LGK Agreement.

          11.3 Cover the tuition costs for up to ten (10) Perfexion training slots for physicians and physicists who will be using the Equipment. Travel and entertainment associated with training shall not be the responsibility of GKF.

     12. Maintenance of Equipment; Damage or Destruction of Equipment.

          12.1 During the Term and except as otherwise provided in this Agreement, GKF, at its cost and expense, shall (a) maintain the Equipment in good operating condition and repair, reasonable wear and tear excepted, and (b) maintain in full force and effect an Advanced Service Agreement with Elekta (“Service Agreement”) and any other service or other agreements required to fulfill GKF’s obligation to repair and maintain the Equipment under this Section 12. Medical Center shall promptly notify GKF in the event of any damage or destruction to the Equipment or of any required maintenance or repairs to the Equipment, regardless of whether such repairs or maintenance are covered or not covered by the Service Agreement. GKF shall pursue all remedies available to it under the Service Agreement and under any warranties made by Elekta with respect to the Equipment so that the Equipment will at all times during the

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Term of this Agreement be free from defects in design, materials and workmanship and will conform to Elekta’s technical specifications concerning the Equipment.

          12.2 GKF and Elekta shall have the right to access the Equipment for the purpose of inspection and the performance of repairs at all reasonable times, upon reasonable advance notice and with a minimum of interference or disruptions to Medical Center’s regular business operations.

          12.3 Medical Center shall be liable for, and in the manner described in Section 22 below shall indemnify GKF from and against, any damage to or destruction of the Equipment caused by the misuse, improper use, or other intentional and wrongful or negligent acts or omissions of Medical Center’s officers, employees, agents, contractors and physicians. In the event the Equipment is damaged as a result of the misuse, improper use, or other intentional and wrongful or negligent acts or omissions of Medical Center’s officers, employees, agents, contractors and/or physicians, to the extent such damage is not covered by the Service Agreement or any warranties or insurance, GKF may service or repair the Equipment as needed and the cost thereof shall be paid by Medical Center to GKF immediately upon written request together with interest thereon at the rate of one percent (1%) per month (or the maximum monthly interest rate permitted to be charged by law between an unrelated, commercial borrower and lender, if less) and reasonable attorneys’ fees and costs incurred by GKF in collecting such amount from Medical Center. Any work so performed by GKF shall not deprive GKF of any of its rights, remedies or actions against Medical Center for such damages.

          12.4 If the Equipment is rendered unusable as a result of any physical damage to or destruction of the Equipment, Medical Center shall give GKF written notice thereof. GKF shall determine, within thirty (30) days after it is given written notice of such damage or destruction, whether the Equipment can be repaired. In the event GKF determines that the Equipment cannot be repaired (a) subject to Section 12.3 above, GKF, at its cost and expense, shall replace the Equipment as soon as reasonably possible taking into account the availability of replacement equipment from Elekta, Elekta’s other then existing orders for equipment, and the then existing limitations on Elekta’s manufacturing capabilities, (b) the Term of this Agreement shall be extended for the period of time the Equipment is unusable, and (c) this Agreement shall continue in full force and effect as though such damage or destruction had not occurred. In the event GKF determines that the Equipment can be repaired, GKF shall cause the Equipment to be repaired as soon as reasonably possible thereafter. Medical Center shall fully cooperate with GKF to effect the replacement of the Equipment or the repair of the Equipment (including, without limitation, providing full access to the Site) following the damage or destruction thereof.

     13. Alterations and Upgrades to Equipment.

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          13.1 Medical Center shall not make any modifications, alterations or additions to the Equipment (other than normal operating accessories or controls) without the prior written consent of GKF. Medical Center shall not, and shall not permit any person other than representatives of Elekta or any other person authorized by GKF to, effect any inspection, adjustment, preventative or remedial maintenance, or repair to the Equipment without the prior written consent of GKF. All modifications, alterations, additions, accessories or operating controls incorporated in or affixed to the Equipment (herein collectively called “additions” and included in the definition of “Equipment”) shall become the property of the GKF upon termination of this Agreement. Included in this Agreement is an Equipment modification allowance of * for modifications that are mutually agreed upon by the parties hereto. Equipment modification costs in excess of * shall be the responsibility of Medical Center.

          13.2 The necessity and financial responsibility for modifications, additions or upgrades to the Equipment, including the reloading of the Cobalt-60 source, shall be mutually agreed upon by GKF and Medical Center. If (a) GKF and Medical Center agree to reload the Cobalt-60 source (i.e., on or around the end of the fifth (5 th ) year of the Term), and (b) GKF pays the reload costs associated therewith up to * then, notwithstanding any provisions to the contrary herein, the initial Term shall be automatically extended for an additional three (3) years. Cobalt-60 reload costs in excess of * shall be the responsibility of Medical Center. Alternatively, Medical Center may elect to pay the entire costs of the Cobalt-60 reload in which case the Term of the Agreement shall remain unchanged.

          13.3 All software upgrades provided at no charge to GKF under the terms of its maintenance agreement with Elekta shall be provided at no charge to Medical Center. All other software upgrades shall be the responsibility of Medical Center, and shall not be included as part of the Equipment modification allowance.

     14. Financing of Equipment by GKF. GKF, in its sole discretion, may finance the Equipment. Financing may be in the form of an installment loan, a capitalized lease or other commercially available debt or financing instrument. If GKF finances the Equipment through an installment loan, GKF shall be required to provide the Equipment as collateral for the loan. If GKF finances the Equipment through a capitalized lease, title shall vest with the lessor until such time as GKF exercises its buy-out option under the lease, if any. If required by the lender, lessor or other financing entity (the “Lender”), GKF may assign its interest under this Agreement as security for the financing. Medical Center’s interest under this Agreement shall be subordinate to the interests of the Lender.

     15. Equipment Operational Costs. Except as otherwise expressly provided in this Agreement, Medical Center shall be responsible and liable for all costs and expenses incurred, directly or indirectly, in connection with the operation and use of the Equipment during the Term, including, without limitation, but subject to Section 11.3 above, the

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costs and expenses required to provide trained physicians, professionals, and technical and support personnel, supplies and other items required to properly operate the Equipment and perform Procedures.

     16. Ta


 
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