Exhibit 10.10

 

LEASE AGREEMENT FOR A GAMMA KNIFE UNIT

 

THIS AGREEMENT FOR A GAMMA KNIFE UNIT on November 1, 1999, (hereinafter,
referred to as the "Agreement") is entered into between GK Financing, LLC, a
California Limited Liability Company, (hereinafter referred to as "GKF"), and
Jackson HMA, Inc. d/b/a Central Mississippi Medical Center, a for profit
Mississippi corporation, (hereinafter referred to as "Medical Center").

 

RECITALS

 

WHEREAS, Medical Center wants to lease a 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 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.          Certificate of Need (CON). 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. This Agreement shall become null and void in the event Medical Center
does not receive a CON, if required, for the Equipment and the provision of
services related thereto after using its best efforts to do so.

 

3.          Delivery of the Equipment and Site preparation. GKF shall arrange to
have the Equipment delivered to Medical Center, at 1850 Chadwick Drive, Jackson,
Mississippi (the "Site") in coordination with Elekta. GKF shall exert its best
faith efforts to expedite the delivery of the Equipment in accordance with the
terms and conditions of the Purchase Agreement for the Equipment by and between
GKF and Elekta. 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 hereto as Exhibit B and
incorporated herein by this reference), 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 mutually acceptable to both parties. 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 herein below 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 and the Equipment's positioning thereon.

 

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 pay to GKF a per
procedure payment of $8,500 for the use of the Equipment. 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 monthly 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.

 

 

 

 

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 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 full replacement value of the Equipment at the time
of its destruction less salvage value, if any. (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 or breach alleged in litigation with regard to the LGK
Agreement.

 

(e)          Provide reasonable and customary marketing materials (i.e.
brochures, announcements, etc.) and marketing support from an administrative and
physician (i.e. seminars by neurosurgeons and radiation therapists to referring
physicians, etc.) commitment standpoint for this clinical service.

 

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.

 

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.

 

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
discussed and mutually decided by GKF and Medical Center.

 

16.         Service Agreement. GKF warrants that it shall simultaneously with
the execution of this Agreement enter into a Service Agreement with Elekta.

 

16.         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.

 

17.         Options to Extend Agreement.

 

(a)          Medical Center shall have the option at the end of the ten (10)
year initial Term to:

 

(i)          Extend 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 at its cost 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 Four Embarcadero
Center, Suite 3620, San Francisco, California, 94111, 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.

 

 

 

 

18.         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.

 

19.         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 from GKF or its assignee is given to Medical
Center.

 

(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)          Medical Center shall fail to observe or perform any of the other
obligations required to be observed or performed by Medical Center hereunder and
such failure shall continue uncured for twenty (20) days after written notice
thereof to Medical Center by GKF;

 

(d)          Medical Center 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 Medical Center 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 Medical Center'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.

 

Upon the occurrence of an Event of Default, 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.

 

 

 

 

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 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.

 

20.         Events of Default by GKF and Remedies.

 

20.1        The occurrence of any one of the following shall constitute an Event
of Default hereunder:

 

20.1.1           GKF shall fail to observe or perform any of its covenants,
duties or obligations arising under this Agreement and such failure shall
continue for a period of thirty (30) days after written notice thereof is given
by Medical Center to GKF; however, if GKF cures the default within the
applicable thirty (30) day period or if the default reasonably requires more
than thirty (30) days to cure, GKF commences to cure the default during the
initial thirty (30) day period and GKF diligently completes the cure as soon as
reasonably possible following the end of the thirty (30) day period, such
default shall not constitute an Event of Default.

 

20.1.2           GKF ceases doing business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its inability to pay
its debts as they become due, files a voluntary petition in bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar arrangement under any present or future statute, law or regulation or
files an answer admitting the material allegations of a petition filed against
it in any such proceeding, consents to or acquiesces in the appointment of a
trustee, receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or it or its shareholders shall take any action looking to
its dissolution or liquidation.

 

20.1.3           Within sixty (60) days after the commencement of any
proceedings against GKF 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 GKF'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.

 

20.2         Upon the occurrence of an Event of Default involving GKF, Medical
Center may at its option do any or all of the following:

 

 

 

 

20.2.1           By written notice to GKF, immediately terminate this Agreement
as to the Equipment and, in such event, GKF shall remove the Equipment at GKF's
sole cost and expense or, in the absence of removal by GKF within a reasonable
period of time after a written request therefor, Medical Center may remove the
Equipment with all due care and store the Equipment at GKF's sole cost and
expense.

 

20.2.2           Seek to recover from GKF such loss as may be realized by
Medical Center in the ordinary course of events as a result of the Event of
Default.

 

20.3         GKF shall in any event remain fully liable for reasonable damages
as provided by law and for all costs and expenses incurred by Medical Center on
account of such default, including but not limited to, all court costs and
reasonable attorneys' fees. However, notwithstanding anything to the contrary
set forth in this Agreement, GKF shall not in any manner be or become liable to
Medical Center for any consequential or incidental damages that may be suffered
by Medical Center which arise out of or result from the Event of Default or any
breach by GKF of this Agreement. The rights and remedies afforded Medical Center
under this Agreement shall be deemed cumulative and not exclusive and shall be
in addition to any other rights or remedies to GKF provided by law or in equity.

 

20.4         Notwithstanding the occurrence of an Event of Default with respect
to GKF (including any claim which would otherwise be in the nature of a
set-off), Medical Center shall fully perform and pay its obligations hereunder
(including payment of all rent). Upon termination of this Agreement or the
exercise of any other rights or remedies under this Agreement or applicable law
following an Event of Default, Medical Center shall, without further request or
demand, pay to GKF all rent payments and other sums owing under this Agreement
when and as due.

 

21.         Indemnification.

 

21.1         Medical Center's Indemnity Agreement. Subject to provisions of this
Agreement, Medical Center, for itself and its successors and assigns, hereby
indemnifies and holds GKF harmless from and against any loss, cost or expense
(including reasonable attorneys' fees) arising out of or relating in any manner
to the failure of Hospital to properly perform any of its obligations to be
performed under the terms of this Agreement.

 

21.2         GKF's Indemnity Agreement. Subject to provisions of this agreement,
GKF, for itself and its successors and assigns, hereby indemnifies and holds
Hospital harmless from and against any loss, cost or expense (including
reasonable attorneys' fees) arising out of or relating in any manner to the
failure of GKF to properly perform any of its obligations to be performed under
the terms of this Agreement.

 

22.         Insurance.

 

(a)          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 $5,000,000 in aggregate per year. University
and GKF, their successors and assigns, shall be named as additional insureds
and/or loss payees on the insurance policies maintained hereunder by the other
party. 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.

 

 

 

 

(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.

 

23.         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   GKF Financing, LLC   Four Embarcadero Center,
Suite 3620   San Francisco, CA 94111     To Medical Center: Chief Executive
Officer   Central Mississippi Medical Center   1850 Chadwick Drive   Jackson,
Mississippi 39204-3479

 

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.

 

24.         Integration/Supersedure. 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.

 

25.         Waivers. To the extent that GKF fails or chooses not to pursue any
of its remedies under this Agreement or pursuant to applicable law, such shall
not prejudice GKF's rights to pursue any of those remedies at any future time
and shall not constitute a waiver of GKF's rights.

 

26.         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).

 

27.         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.

 

28.         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.

 

29.         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.

 

Medical Center GK Financing, LLC     By: /s/ Joseph Mullany By: /s/ Craig K.
Tagawa Joseph Mullany Craig K. Tagawa Vice President, Mississippi Division Chief
Executive Officer     By: /s/ Timothy R. Parry   Timothy R. Parry   Vice
President & General Counsel       By: /s/ Earl P. Holland   Earl P. Holland  
Vice Chairman & Chief Operating Officer