Document:

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                                                                   EXHIBIT 10.13

                     FORM OF AMENDED STOCK OPTION AGREEMENT
                            EFFECTIVE OCTOBER 1, 2004
                      AMENDED AND RESTATED 1989 STOCK PLAN
 AND FOR USE WITH OTHER PEOPLESOFT STOCK OPTION PLANS (WITH CONFORMING CHANGES)

PLEASE READ AND ELECTRONICALLY SIGN THIS PEOPLESOFT, INC. NONSTATUTORY OPTION
AGREEMENT (THE "OPTION AGREEMENT"), ACCEPTING THE TERMS AND CONDITIONS OF THE
PLAN AND THIS OPTION AGREEMENT.

                                PEOPLESOFT, INC.
                       NONSTATUTORY STOCK OPTION AGREEMENT

      Subject to the terms, definitions and provisions of the Amended and
Restated 1989 Stock Plan ("the Plan"), even if conflicting herewith, PEOPLESOFT,
INC. (the "Company"), hereby grants

to         (the "Optionee"), the following option (the "Option") to purchase
shares of PeopleSoft's common stock:

<TABLE>
<CAPTION>
     GRANT ID              GRANT DATE       SHARES GRANTED      EXERCISE PRICE          EXPIRATION DATE
<S>                        <C>              <C>                 <C>                     <C>
     _______               ____, 2004        __________          $________                ______, 20__
</TABLE>

Subject to Optionee maintaining Continuous Status as an Employee as of such
dates, the Option shall vest and become exercisable as follows:

VESTING DATE             SHARES VESTED/EXERCISABLE

____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______
____________                    ______

      Notwithstanding the foregoing vesting schedule, if there is a "Change of
Control" (as such term is defined below) and, within one (1) year following such
Change of Control, Optionee's Continuous Status as an employee of the Company,
an affiliate of the Company, or a successor to either the Company or an
affiliate thereof (collectively, the "Employer") is terminated by reason of his
or her Involuntary

<PAGE>

Termination or Constructive Discharge, the Option shall vest and become
exercisable in full. For purposes of this Agreement, the following definitions
shall apply:

      "Change of Control" means:

      (a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing forty-five percent (45%) or more of the total voting
power represented by the Company's then outstanding voting securities; or

      (b) A change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company); or

      (c) The consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty-five percent
(55%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation; or

      (d) The consummation of the sale or disposition by the Company of all or
substantially all of the Company's assets; or

      (e) any other event that the Board determines to be a Change of Control.

      "Involuntary Termination" means termination of Optionee's employment by
the Employer, other than by reason of death, permanent disability or for Cause,
on or after a Change of Control.

      "Cause" means (i) a material act of dishonesty by Optionee in connection
with Optionee's employment with the Employer; (ii) Optionee's conviction of, or
plea of nolo contendere to, a felony; (iii) Optionee's gross misconduct in
connection with the performance of his or her duties; (iv) Optionee's death or
permanent disability preventing him or her from performing the usual and
necessary functions of his or her position; (v) Optionee's material breach of
his or her obligations as an employee of the Employer; or (vi) Optionee's
failure to materially comply with the Employer's policies. With respect to
clauses (iii), (v) and (vi), such actions shall not constitute Cause if they are
cured by Optionee within thirty (30) days following delivery to Optionee of a
written explanation specifying the basis for the Employer's belief that it has
Cause, provided that the Employer deems such action capable of being cured.

      "Constructive Discharge" means the Optionee's termination of employment
with the Employer following (i) the occurrence on or after a Change of Control
of one or more of the following events ("Constructive Discharge Events"): (a) a
material reduction in the Optionee's base salary or target bonus potential under
the Employee Incentive Compensation Plan and/or other applicable variable
compensation plans, provided that any bonus guarantees made for any period shall
not establish the "target bonus potential," and provided further that "target
bonus potential" shall not include any annual

<PAGE>

discretionary bonuses that maybe awarded by the Company from time to time; (b)
the failure to provide the Optionee with benefits and perquisites that, in the
aggregate, are substantially comparable in value to those to which
similarly-situated employees of the acquiror are entitled; or (c) a change in
Optionee's principal work location to a location more than 50 miles from his
principal work location immediately preceding the Change of Control, provided
that the Optionee's commute is at least 10 miles longer as a result of the
relocation compared to the Optionee's commute to the current location, [In the
case of an Optionee serving as President, Co-President, Executive Vice
President, Senior Vice President or Group Vice President: or (d) a material
reduction in Optionee's authority or duties (other than a material reduction in
authority or duties occurring solely by virtue of a Change of Control, as for
example, when an Optionee retains the position in the Company but the Company is
a wholly-owned, privately-held subsidiary or division of a larger company, or
other than a reduction for Cause); provided, however, that any person serving as
President prior to a Change of Control shall be deemed to have experienced a
Constructive Discharge after a Change of Control (other than a Change of Control
which occurred solely and exclusively as a result of an event described in
clause (b) of the definition of "Change of Control"), notwithstanding his or her
continued employment by the Company or the acquirer after the Change of Control
or the lack of a change in job description or duties and responsibilities of
such person following the Change of Control, and (ii) the Constructive Discharge
Event continues for more than thirty (30) days after delivery of written notice
by the Optionee to the Employer specifying the circumstances of the alleged
Constructive Discharge, which notice must be delivered to the Employer within
five (5) business days following the Constructive Discharge Event, and (iii)
Optionee resigns from all positions with the Employer within ten (10) days
following the expiration of Employer's 30 day cure period, where such
Constructive Discharge Event is still ongoing.

      Notwithstanding anything in this Agreement to the contrary, if, within six
months prior to the date on which a Change of Control occurs, Optionee's
employment with the Employer is terminated by the Employer other than by reason
of the Optionee's death, permanent disability or circumstances that would
constitute Cause, or the terms and conditions of Optionee's employment are
adversely changed in a manner that would constitute grounds for termination of
employment by the Optionee by reason of a Constructive Discharge, and it is
reasonably demonstrated that such termination of employment or adverse change
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control or (ii) otherwise arose in connection
with or in anticipation of the Change of Control, then for all purposes of this
Agreement, such termination of employment shall be deemed to have occurred
immediately after the Change of Control and shall be considered either
termination of Optionee's employment without Cause by the Employer or
termination of Optionee's employment by the Optionee by reason of a Constructive
Discharge, as the case may be.

      In the event of termination of Optionee's Continuous Status as an
Employee, Optionee may exercise this Option only to the extent that Optionee was
vested at the date of termination. If termination resulted from the death of the
Optionee, the Optionee's estate or person who acquired the right to exercise the
Option by bequest or inheritance will be entitled to exercise the Option as if
the termination had occurred one (1) year from the date of death. To the extent
that Optionee was not vested at the date of termination the Option shall
terminate. In addition, the Option shall terminate, even as to vested shares, if
the Optionee does not exercise the Option within ninety (90) days from
termination or within twelve (12) months in the event of the Optionee's death or
Disability. In no event may this Option be exercised after the Term/Expiration
Date.

      To exercise the Option, Optionee must contact Optionee's broker and have
them contact the PeopleSoft Stock Administration Department. Payment of the
Exercise Price may be made by: (i) cash or check; (ii) a "cashless exercise"
(irrevocable instructions to a broker to deliver promptly to the Company the
amount of the sale or loan proceeds required to pay the Exercise Price); or
(iii) if Optionee is located in the United States, surrender of other shares of
Common Stock of the Company having a Fair

<PAGE>

Market Value, which on the date of surrender is equal to the aggregate Exercise
Price of the Shares on which the Option is being exercised, and, if such shares
were acquired from PeopleSoft, have been held by the Optionee for more than six
(6) months. This Option may not be exercised for a fraction of a share.

      The Option is a nonstatutory stock option and is not intended to qualify
for any special tax benefits to the Optionee. Optionee understands that Optionee
may suffer adverse tax consequences as result of Optionee's exercise of the
Option or disposition of the Shares acquired under the Option. OPTIONEE SHOULD
READ THE PLAN AND PROSPECTUS AND CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.

      Optionee acknowledges and agrees that the ultimate liability for any and
all income tax, social insurance, payroll tax, payment on account or other
tax-related withholding ("Tax-Related Items") due by the Optionee is and remains
Optionee's responsibility and liability and that the Company and/or Optionee's
employer (i) make no representations or undertakings regarding the treatment of
any Tax-Related Items in connection with any aspect of the Option grant,
including the grant, vesting or exercise of the Option and the subsequent sale
of Shares acquired pursuant to such exercise and the receipt of any dividends;
and (ii) do not commit to structure the terms of the grant or any aspect of the
Option to reduce or eliminate Optionee's liability for Tax-Related Items.

      Prior to exercise of the Option, Optionee shall pay or make adequate
arrangements satisfactory to Company and/or Optionee's employer to satisfy all
withholding and payment on account obligations of Company and/or Optionee's
employer. In this regard, Optionee authorizes Company and/or Optionee's employer
to withhold all applicable Tax-Related Items legally payable by Optionee from
Optionee's wages or other cash compensation paid to Optionee by Company and/or
Optionee's employer or from proceeds of sale of Shares. Alternatively, or in
addition, if permissible under local law, Company may (i) sell or arrange for
the sale of Shares that Optionee is due to acquire to meet the minimum
withholding obligation for Tax-Related Items, and/or (ii) withhold in Shares,
provided that the Company only withholds the amount necessary to satisfy the
minimum withholding amount. Any estimated withholding which is not required in
satisfaction of any Tax-Related Items will be repaid to Optionee by Company or
Optionee's employer. Finally, Optionee shall pay to Company or Optionee's
employer any amount of any Tax-Related Items that Company or Optionee's employer
may be required to withhold as a result of Optionee's participation in the Plan
or Optionee's purchase of Shares that cannot be satisfied by the means
previously described. Company may refuse to honor the exercise and refuse to
deliver Shares if Optionee fails to comply with Optionees obligations in
connection with the Tax-Related Items as described in this paragraph.

      Regardless of any action the Company or Optionee's employer takes with
respect to any or all Tax-Related Items, Optionee acknowledges and agrees that
the vesting of shares pursuant to the Option hereof is earned only by continuing
employment at the will of the Company, except as otherwise provided herein with
respect to a Change of Control. Optionee further acknowledges and agrees that
nothing in this Agreement, nor in the Company's Stock Option Plan shall confer
upon Optionee any right with respect to continuation of employment by the
Company, nor shall interfere in any way with Optionee's right or the Company's
right to terminate Optionee's employment at anytime, with or without cause.

      This Option may not be transferred in any manner otherwise than by will or
by laws of descent or distribution and may be exercised during the lifetime of
the Optionee only by the Optionee. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assignees of the Option.

<PAGE>

      OPTIONEE HEREBY EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO THE COLLECTION,
USE AND TRANSFER, IN ELECTRONIC OR OTHER FORM, OF OPTIONEE'S PERSONAL DATA AS
DESCRIBED IN THIS DOCUMENT BY AND AMONG, AS APPLICABLE, OPTIONEE'S EMPLOYER AND
COMPANY AND ITS SUBSIDIARIES FOR THE EXCLUSIVE PURPOSE OF IMPLEMENTING,
ADMINISTERING AND MANAGING OPTIONEE'S PARTICIPATION IN THE PLAN. OPTIONEE
UNDERSTANDS THAT COMPANY AND OPTIONEE'S EMPLOYER HOLD CERTAIN PERSONAL
INFORMATION ABOUT OPTIONEE, INCLUDING, BUT NOT LIMITED TO, OPTIONEE'S NAME, HOME
ADDRESS AND TELEPHONE NUMBER, DATE OF BIRTH, SOCIAL INSURANCE NUMBER OR OTHER
IDENTIFICATION NUMBER, SALARY, NATIONALITY, JOB TITLE, ANY SHARES OF STOCK OR
DIRECTORSHIPS HELD IN COMPANY, DETAILS OF ALL OPTIONS OR ANY OTHER ENTITLEMENT
TO SHARES OF STOCK AWARDED, CANCELED, EXERCISED, VESTED, UNVESTED OR OUTSTANDING
IN OPTIONEE'S FAVOR, FOR THE PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING
THE PLAN ("DATA"). OPTIONEE UNDERSTANDS THAT DATA MAY BE TRANSFERRED TO ANY
THIRD PARTIES ASSISTING IN THE IMPLEMENTATION, ADMINISTRATION AND MANAGEMENT OF
THE PLAN, THAT THESE RECIPIENTS MAY BE LOCATED IN OPTIONEE'S COUNTRY, OR
ELSEWHERE, AND THAT THE RECIPIENT'S COUNTRY MAY HAVE DIFFERENT DATA PRIVACY LAWS
AND PROTECTIONS THAN OPTIONEE'S COUNTRY. OPTIONEE UNDERSTANDS THAT HE OR SHE MAY
REQUEST A LIST WITH THE NAMES AND ADDRESSES OF ANY POTENTIAL RECIPIENTS OF THE
DATA BY CONTACTING OPTIONEE'S LOCAL HUMAN RESOURCES REPRESENTATIVE. OPTIONEE
AUTHORIZES THE RECIPIENTS TO RECEIVE, POSSESS, USE, RETAIN AND TRANSFER THE
DATA, IN ELECTRONIC OR OTHER FORM, FOR THE PURPOSES OF IMPLEMENTING,
ADMINISTERING AND MANAGING OPTIONEE'S PARTICIPATION IN THE PLAN, INCLUDING ANY
REQUISITE TRANSFER OF SUCH DATA AS MAY BE REQUIRED TO A BROKER OR OTHER THIRD
PARTY WITH WHOM OPTIONEE DEPOSITS ANY SHARES OF STOCK ACQUIRED UPON EXERCISE OF
THE OPTION. OPTIONEE UNDERSTANDS THAT DATA WILL BE HELD ONLY AS LONG AS IS
NECESSARY TO IMPLEMENT, ADMINISTER AND MANAGE OPTIONEE'S PARTICIPATION IN THE
PLAN. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY, AT ANY TIME, VIEW DATA, REQUEST
ADDITIONAL INFORMATION ABOUT THE STORAGE AND PROCESSING OF DATA, REQUIRE ANY
NECESSARY AMENDMENTS TO DATA OR REFUSE OR WITHDRAW THE CONSENTS HEREIN, IN ANY
CASE WITHOUT COST, BY CONTACTING IN WRITING OPTIONEE'S LOCAL HUMAN RESOURCES
REPRESENTATIVE. OPTIONEE UNDERSTANDS, HOWEVER, THAT REFUSING OR WITHDRAWING
OPTIONEE'S CONSENT MAY AFFECT OPTIONEE'S ABILITY TO PARTICIPATE IN THE PLAN. FOR
MORE INFORMATION ON THE CONSEQUENCES OF OPTIONEE'S REFUSAL TO CONSENT OR
WITHDRAWAL OF CONSENT, OPTIONEE UNDERSTANDS THAT OPTIONEE MAY CONTACT OPTIONEE'S
LOCAL HUMAN RESOURCES REPRESENTATIVE.

      In accepting the grant, Optionee acknowledges that:

      (1) the Plan is established voluntarily by the Company, it is
discretionary in nature and it may be modified, amended, suspended or terminated
by the Company at any time, unless otherwise provided in the Plan and this
Option Agreement;

      (2) the grant of the Option is voluntary and occasional and does not
create any contractual or other right to receive future grants of options, or
benefits in lieu of options, even if options have been granted repeatedly in the
past;

      (3) all decisions with respect to future option grants, if any, will be at
the sole discretion of the Company;

      (4) Optionee's participation in the Plan shall not create a right to
further employment with Optionee's employer and shall not interfere with the
ability of Optionee's employer to terminate Optionee's employment relationship
at any time with or without cause;

      (5) Optionee is voluntarily participating in the Plan;

      (6) the Option is an extraordinary item that does not constitute
compensation of any kind for services of any kind rendered to the Company or
Optionee's employer, and which is outside the scope of Optionee's employment
contract, if any;

<PAGE>

      (7) the Options are not part of normal or expected compensation or salary
for any purposes, including, but not limited to, calculating any severance,
resignation, termination, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments;

      (8) in the event that Optionee is not an employee of the Company, the
Option grant will not be interpreted to form an employment contract or
relationship with the Company; and furthermore, the Option grant will not be
interpreted to form an employment contract with Optionee's employer or any
subsidiary or affiliate of the Company;

      (9) the future value of the underlying Shares is unknown and cannot be
predicted with certainty;

      (10) if the underlying Shares do not increase in value, the Options will
have no value;

      (11) if Optionee exercises the Option and obtains Shares, the value of
those Shares acquired upon exercise may increase or decrease in value, even
below the Exercise Price;

      (12) in consideration of the grant of Options, no claim or entitlement to
compensation or damages shall arise from termination of the Options or
diminution in value of the Options or Shares purchased through exercise of the
Options resulting from termination of Optionee's employment by the Company or
Optionee's employer (for any reason whatsoever and whether or not in breach of
local labor laws) and Optionee irrevocably releases the Company and Optionee's
employer from any such claim that may arise; if, notwithstanding the foregoing,
any such claim is found by a court of competent jurisdiction to have arisen,
then, by signing this Option Agreement, Optionee shall be deemed irrevocably to
have waived Optionee's entitlement to pursue such claim; and

      (13) notwithstanding any terms or conditions of the Plan to the contrary,
in the event of involuntary termination of Optionee's employment (whether or not
in breach of local labor laws), Optionee's right to receive Options and vest in
Options under the Plan, if any, will terminate effective as of the date that
Optionee is no longer actively employed and will not be extended by any notice
period mandated under local law (e.g., active employment would not include a
period of "garden leave" or similar period pursuant to local law); furthermore,
in the event of involuntary termination of employment (whether or not in breach
of local labor laws), Optionee's right to exercise the Options after termination
of employment, if any, will be measured by the date of termination of Optionee's
active employment and will not be extended by any notice period mandated under
local law; the Administrator shall have the exclusive discretion to determine
when Optionee is no longer actively employed for purposes of Optionee's Option
grant.

      If Optionee is employed in any of the following countries: Argentina,
Belgium Brazil, Chile, China, Denmark, Germany, Hong Kong, India, Ireland,
Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Quebec, Singapore,
South Africa, South Korea, Spain, Switzerland, or Venezuela, Optionee hereby
agrees to access the Option Agreement Addendum for the country in which Optionee
is employed and understands and agrees that all provisions of the Option
Agreement Addendum of the country in which Optionee is employed are fully
incorporated into this Option Agreement. If Optionee resides in Quebec, Optionee
hereby agrees to access the Quebec Option Agreement Addendum and understands and
agrees that all its provisions are fully incorporated into this Option
Agreement. In the event of a conflict between any of the provisions of the
Option Agreement Addenda and the Option Agreement or any other Plan documents,
the provisions of the Option Agreement Addenda shall prevail.

      It is the Optionee's responsibility to read and understand the terms of
the Plan and applicable SubPlans, Addenda, Prospectus, and applicable Option
Agreement Addenda (the "Plan Documents"), which are available on the Stock
Administration Intranet site or from the Stock Administration

<PAGE>

Department. Optionee is familiar with the terms and provisions of the Plan, this
Option Agreement and the Plan Documents, and hereby accepts this Option subject
to all of the terms and provisions of the Plan and the Plan Documents. Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of Administrator upon any questions relating to the Plan, this
Option Agreement and the Plan Documents.

      This Option grant is governed by, and subject to, the laws of the State of
California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties evidenced by this grant or the
Option Agreement, the parties hereby submit to and consent to the exclusive
jurisdiction of the State of California and agree that such litigation shall be
conducted only in the courts of Alameda, California, or the federal courts for
the United States for the Northern District of California, and no other courts,
where this grant is made and/or to be performed.

      If Optionee has received this or any other document related to the Plan
translated into a language other than English and if the translated version is
different than the English version, the English version will control.

      The Company may, in its sole discretion, decide to deliver any documents
related to the Option granted under and Optionee's participation in the Plan or
future Options that may be granted under the Plan by electronic means or to
request Optionee's consent to participate in the Plan by electronic means.
Optionee hereby consents to receive such documents by electronic delivery and,
if requested, agrees to participate in the Plan through an on-line or electronic
system established and maintained by the Company or another third party
designated by the Company.

      The provisions of this Option Agreement are severable and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.

      The Plan, the Option Agreement and the Plan Documents constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by both
parties.

   AGREED AND EXECUTED AS FOLLOWS:

   PeopleSoft, Inc.

   A Delaware Corporation                             Employee
   By:

      _____________________________                   __________________________
      Kevin Parker
      Co-President

   IMPORTANT: YOU WILL NOT BE ABLE TO EXERCISE THIS OPTION UNTIL YOU HAVE
   SIGNED AND ACCEPTED THE TERMS OF THIS GRANT AGREEMENT.

                      [FOREIGN EMPLOYEE AMENDMENTS OMITTED]exv10w45

 

Exhibit 10.45

EQUIPMENT LEASE AGREEMENT

     THIS EQUIPMENT LEASE AGREEMENT (“Agreement”) is made and entered into on
May 28, 2003, by and between GK FINANCING, LLC, a California limited liability
company (“GKF”), and Lehigh Valley Hospital (“Hospital”), a not for profit
Pennsylvania corporation, with reference to the following facts:

R E C I T A L S

     WHEREAS, Hospital wants to lease a Leksell Stereotactic Gamma Unit, model
C with Automatic Positioning System, manufactured by Elekta Instruments, Inc.,
as specified in Exhibit A of the LGK Agreement (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 Hospital, pursuant to the terms and conditions of this Agreement.

A G R E E M E N T

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

     1.  Lease.  Subject to and in accordance with the covenants and conditions
set forth in this Agreement, GKF hereby leases to Hospital, and Hospital hereby
leases from GKF, the Equipment. The Equipment to be leased to Hospital
pursuant to this Agreement shall include the Gamma Knife technology as
specified in Exhibit 1, including all hardware and software related thereto.

     2.  LGK
Agreement.  Simultaneously with the execution of this Agreement,
Hospital and Elekta shall enter into that certain LGK Agreement (the “LGK
Agreement”), a copy of which is attached hereto as Exhibit 1. Hospital shall
perform, satisfy and fulfill all of its obligations arising under the LGK
Agreement when and as required thereunder. Hospital acknowledges that GKF is a
third party beneficiary of the LGK Agreement and, in that capacity, GKF shall
be entitled to enforce Hospital’s performance, satisfaction and fulfillment of
its obligations thereunder.

     3.  Term
of the Agreement.  The initial term of this Agreement (the “Term”)
shall commence as of the date hereof and, unless earlier terminated or extended
in accordance with the provisions of this Agreement, shall continue for a
period of ten (10) years following the date of the performance of the first
clinical Gamma Knife procedure (the “First Procedure Date”) at the

 

 

Site. Hospital’s obligation to make the rental payments to GKF for the
Equipment described in Section 8 below shall commence as of the First Procedure
Date.

     4.  User License.

          4.1  Hospital shall apply for and obtain in a timely manner a User License
from the Nuclear Regulatory Commission and, if necessary, from the applicable
state agency authorizing it to take possession of and maintain the Cobalt
supply required in connection with the use of the Equipment during the term of
this Agreement. Hospital also shall apply for and 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 2.2 of the LGK Agreement.

     5.  Delivery of Equipment; Site.

          5.1  GKF shall coordinate with Elekta and Hospital to have the Equipment
delivered to Hospital at Lehigh Valley Hospital-Muhlenberg (the “Site”) on or
prior to the delivery date agreed upon by Hospital, GKF and Elekta in writing.
GKF makes no representations or warranties concerning delivery of the Equipment
to the Site or the actual date thereof.

          If the Equipment is not delivered by the scheduled delivery date specified
in a separate written agreement plus a sixty (60) day grace period (other than
by reasons of force majeure as provided in Paragraph 23.16 below) (the “Late
Delivery Date”), GKF shall reimburse Hospital upon written request for
Hospital’s actual financing costs (which financing costs shall not exceed
interest at the prime interest rate of Bank of America plus 2%) based upon
Hospital’s cost to install the Equipment (cost is estimated at approximately
$500,000) for the period between the Late Delivery Date and the date that the
Equipment is delivered to the Site.

          5.2  Hospital, at its cost and expense, shall provide a safe, convenient
and properly prepared 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 B to the LGK Agreement)
(collectively the “Site Planning Criteria”). The location of the Site shall be
subject to the prior approval of GKF.

     6.  Site Preparation and Installation of Equipment.

          6.1  Hospital, 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 Hospital (and all material changes thereto following approval by
GKF and Elekta) shall be subject to the written approval of GKF and Elekta
prior to commencement of construction at the Site. Hospital shall provide GKF
and Elekta with a reasonable period of time for the review and consideration of
all plans and specifications following the submission thereof for approval.
Following approval of the plans and specifications by GKF and Elekta, Hospital,
at its cost and expense, shall obtain 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 GKF and Elekta,
Hospital, 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, Hospital, at its cost and expense, shall select, purchase and install all
radiation monitoring equipment, devices, safety circuits and radiation warning
signs required at the Site in connection with the use and operation of the
Equipment, all in accordance with applicable federal, state and local laws,
rules, regulations or custom.

          6.3  In addition to construction and improvement of the Site, Hospital, 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  Upon completion of construction, the Site shall (a) comply in all
respects with the Site Planning Criteria and all applicable federal, state and
local laws, rules and regulations, and (b) be safe and suitable for the ongoing
use and operation of the Equipment during the Term.

          6.5  Hospital shall use its reasonable efforts to satisfy its obligations
under this Section 6 in a timely manner. Hospital shall keep GKF informed in a
timely manner 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,
Hospital 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. If the Site is not complete
as of the delivery date described in Section 5.1 above plus a sixty (60) day
grace period (other than by reasons of force majeure as provided in Section 23
below) (the “late completion date”), Hospital shall reimburse GKF for its
out-of-pocket financing costs incurred with respect the Equipment at the Bank
of America prime

 

 

interest rate (which rate is sometimes referred to by the Bank as its
“reference rate”) plus 2% based upon GKF’s cost of the Equipment for the period
between the late completion date and the date that the Site is completed to the
extent necessary to allow for the installation, positioning and testing of the
Equipment.

          If the Equipment is not delivered by the scheduled delivery date specified
in a separate written agreement plus a sixty (60) day grace period (other than
by reasons of force majeure as provided in Paragraph 23.16 below) (the “Late
Delivery Date”), GKF shall reimburse Hospital upon written request for
Hospital’s actual financing costs (which financing costs shall not exceed
interest at the prime interest rate of Bank of America plus 2%) based upon
Hospital’s direct costs incurred to prepare and construct the Site for the
Equipment for the period between the Late Delivery Date and the date the
Equipment is actually delivered to the Site.

          6.6  During the Term, Hospital, at its cost and expense, shall maintain the
Site in a good working order, condition and repair, reasonable wear and tear
excepted.

          6.7  Hospital shall be liable for, and shall indemnify GKF in the manner
described in Section 22 below from and against, all damage to the Equipment
caused by (a) defects in construction of the Site or in installation or
positioning the Equipment at the Site; (b) defects arising out of materials or
parts provided, modified or designed by Hospital for or with respect to the
Site; (c) negligent, intentional or wrongful acts or omissions by Hospital or
any of its officers, directors, agents, contractors (or their subcontractors),
or employees in connection with the construction and preparation of the Site;
and (d) negligent or intentional and wrongful operation of the Equipment at the
Site. Further, neither the review and approval of Site plans, specifications
and/or positioning plans by GKF and/or Elekta, nor the construction of any
other Site preparation, shall relieve Hospital for liability for damages to the
Equipment caused by the failure to comply with applicable federal, state or
local laws or regulations, including building codes, or those portions of the
Site Planning Criteria relating to the load bearing capacity of the floor of
the treatment room and to radiation protection.

     7.  Marketing
Support.  GKF, in coordination with Hospital, shall provide
marketing support for the Gamma Knife service to be provided by Hospital. Not
less than ninety (90) days prior to the First Procedure Date and the
commencement of each succeeding twelve (12) month period during the Term, GKF
and Hospital shall develop a mutually agreed upon marketing budget and plan for
the clinical service to be supported by the Equipment for the succeeding twelve
(12) month period of the Term. Once approved, the marketing budget and plan
shall be implemented by Hospital in accordance with its terms. As funds are
expended by Hospital in accordance with the marketing budget and plan, Hospital
shall submit invoices (together with documentary evidence supporting the
invoices) for its expenditures and, promptly following the receipt of such
invoices, GKF shall reimburse Hospital for * of the expenditures up to an
annual maximum of *. It is acknowledged by the parties that such expenses to
be reimbursed by GKF as provided in this Section 7 have been included in GKF’s
calculation of Hospital’s Lease Payments so as to allow GKF to recover such GKF
reimbursed expenses during the Term of this Agreement.

 

 

     8.  Per
Procedure Payments.  As rent for the lease of the Equipment to
Hospital pursuant to this Agreement, Hospital shall pay to GKF the sum of *
for each Procedure. Hospital shall pay GKF this amount (the “Lease Payment”)
for each “Procedure” that is performed by Hospital or its representatives or
its employees or affiliated health care entities, irrespective of whether the
Procedure is performed on the Equipment or using any other equipment or
devices. It is acknowledged that a physician that is not employed by Hospital
shall not be deemed to be a representative or affiliated health care entity of
Hospital. As used herein, a “Procedure” means any treatment that involves
stereotactic, external, single fraction, conformal radiation, commonly called
radiosurgery, that may include one or more isocenters during the patient
treatment session, delivered to any site(s) superior to the foramen magnum.

     Within ten (10) days following the end of each month (or portion thereof)
during the term of this Agreement, Hospital shall inform GKF in writing as to
the number of Procedures performed during that month utilizing the Equipment
and any other devices. If no Procedures are performed by Hospital or any other
person utilizing the Equipment or any other equipment or devices, no Lease
Payments shall be owing by Hospital to GKF. GKF shall submit a rent invoice to
Hospital on the last day of each calendar month (or portion thereof) for the
actual number of Procedures performed during the calendar month. Hospital
shall pay the rent invoice within forty five (45) days after submission by GKF
to Hospital. All or any portion of a rent invoice which is not paid in full
within sixty (60) days after submission shall bear interest at the rate of one
and one-half percent (1.50%) per month (or the maximum monthly interest rate
permitted to be charged by law between an unrelated, commercial borrower and
lender, if less) until the unpaid rent invoice together with all accrued
interest thereon is paid in full. If GKF shall at any time accept a rent
payment from Hospital after it shall become due, such acceptance shall not
constitute or be construed as a waiver of any or all of GKF’s rights under this
Agreement, including the rights of GKF set forth in Section 20 hereof.

     In the event the Equipment cannot perform Gamma Knife procedures for
fourteen (14) consecutive days due to Equipment malfunction, the Hospital will
not be required to pay Lease Payments for Procedures performed on alternative
Equipment during the period subsequent to the 14th day until the Equipment
malfunction is repaired by GKF.

     Within ten (10) days after Hospital’s receipt of written request by GKF,
GKF shall have the right to audit Hospital’s books and records (including,
without limitation, the books and records pertaining to any other radiosurgery
equipment or devices) to verify the number of Procedures that have been
performed by Hospital, and Hospital shall provide GKF with access to such books
and records; provided that any patient names or identifiers shall not be
disclosed.

     9.  Use of the Equipment.

          9.1  The Equipment shall be used by Hospital only at the Site and shall not
be removed therefrom. Hospital shall use the Equipment only in the regular and
ordinary course of Hospital’s business operations and only within the capacity
of the Equipment as determined by Elekta’s specifications. Hospital shall not
use nor permit the Equipment to be used in any

 

 

manner nor for any purpose which, in the opinion of Elekta or GKF, the
Equipment is not designed or reasonably suitable.

          9.2  This is an agreement of lease only. Nothing herein shall be construed
as conveying to Hospital any right, title or interest in or to the Equipment,
except for the express leasehold interest granted to Hospital for the Term.
All Equipment shall remain personal property (even though said Equipment may
hereafter become attached or affixed to real property) and the title thereto
shall at all times remain exclusively in GKF.

          9.3  During the Term, upon the request of GKF, Hospital shall promptly
affix to the Equipment in a prominent place, or as otherwise directed by GKF,
labels, plates, insignia, lettering or other markings supplied by GKF
indicating GKF’s ownership of the Equipment, and shall keep the same affixed
for the entire Term. Hospital hereby authorizes GKF to cause this Lease 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, at GKF’s cost and expense. Hospital also shall
promptly execute and deliver, or cause to be executed and delivered, to GKF any
statement or instrument requested by GKF for the purpose of evidencing GKF’s
interest in the Equipment, including financing statements and waivers with
respect to rights in the Equipment from any owners or mortgagees of any real
estate where the Equipment may be located.

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

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

          10.1  Provide properly trained professional, technical and support
personnel and supplies required for the proper performance of Gamma Knife
procedures utilizing the Equipment. In this regard, Hospital shall maintain on
staff a minimum of one (1) Gamma Knife trained team comprised of a
neurosurgeon, radiation oncologist and physicist. Hospital will use its best
efforts to have two (2) Gamma Knife trained teams during the term of the
Agreement. The Gamma Knife shall be available for use by all credentialed
neurosurgeons and radiation oncologists.

          10.2  Direct, supervise and administer the diagnosis, treatment and care of
all patients who receive Gamma Knife procedures.

 

 

          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, etc.) for
the Gamma Knife service to be operated by the Hospital.

          10.4  Keep and maintain the Equipment and the Site fully protected, secure
and free from unauthorized access or use by any person.

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

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

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

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

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

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

          12.3  Hospital shall be liable for, and in the manner described in Section
22 below shall indemnify GKF from and against, any damage to or destruction of
the Equipment caused by the misuse, improper use, or other intentional and
wrongful or negligent acts or omissions of Hospital’s officers, employees,
agents, contractors and physicians. In the event the Equipment is damaged as a
result of the misuse, improper use, or other intentional and wrongful

 

 

or negligent acts or omissions of Hospital officers, employees, agents,
contractors and physicians, to the extent such damage is not covered by the
Service Agreement or any warranties or insurance, GKF may service or repair the
Equipment as needed and the cost thereof shall be paid by Hospital to GKF
immediately upon written request together with interest thereon at the rate of
one and one-half percent (1.50%) per month (or the maximum monthly interest
rate permitted to be charged by law between an unrelated, commercial borrower
and lender, if less) and reasonable attorneys’ fees and costs incurred by GKF
in collecting such amount from Hospital. Any work so performed by GKF shall
not deprive GKF of any of its rights, remedies or actions against Hospital for
such damages.

          12.4  If the Equipment is rendered unusable as a result of any physical
damage to or destruction of the Equipment, Hospital shall give GKF written
notice thereof. GKF shall determine, within thirty (30) days after it is given
written notice of such damage or destruction, whether the Equipment can be
repaired. In the event GKF determines that the Equipment cannot be repaired
(a) 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, and (b)
this Agreement shall continue in full force and effect as though such damage or
destruction had not occurred. In the event GKF determines that the Equipment
can be repaired, GKF shall cause the Equipment to be repaired as soon as
reasonably possible thereafter. Hospital shall fully cooperate with GKF to
effect the replacement of the Equipment or the repair of the Equipment
(including, without limitation, providing full access to the Site) following
the damage or destruction thereof.

     13.  Alterations and Upgrades to Equipment.

          13.1  Hospital shall not make any modifications, alterations or additions
to the Equipment (other than normal operating accessories or controls) without
the prior written consent of GKF. Hospital shall not, and shall not permit any
person other than representatives of Elekta or any other person authorized by
GKF to, effect any inspection, adjustment, preventative or remedial
maintenance, or repair to the Equipment without the prior written consent of
GKF. All modifications, alterations, additions, accessories or operating
controls incorporated in or affixed to the Equipment (herein collectively
called “additions” and included in the definition of “Equipment”) shall become
the property of the GKF upon termination of this Agreement.

          13.2  The necessity and financial responsibility for modifications,
additions or upgrades to the Equipment, including the reloading of the
Cobalt-60 source, shall be mutually agreed upon by GKF and Hospital. In the
event GKF and Hospital agree to reload the Cobalt-60 source (i.e., in
approximately the seventh (7th) year of the Term), and GKF pays certain costs
associated therewith, notwithstanding any provisions to the contrary herein,
the initial Term shall be automatically extended for a period of two (2) years.
It is the intent of the parties that GKF shall be responsible for Equipment
related costs and expenses and that Hospital shall be responsible for Site
related costs and expenses for modifications, additions or upgrades to the

 

 

Equipment, including the reloading of the Cobalt-60 source that are
mutually agreed upon by GKF and Hospital.

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

     15.  Equipment Operational Costs. Except as otherwise expressly provided
in this Agreement, Hospital shall be responsible and liable for all costs and
expenses incurred, directly or indirectly, in connection with the operation and
use of the Equipment during the Term, including, without limitation, the costs
and expenses required to provide trained physicians, professionals, and
technical and support personnel, supplies and other items required to properly
operate the Equipment and perform Gamma Knife procedures. Between Hospital and
GKF, Hospital shall be fully liable for, and in the manner described in Section
22 below shall indemnify and hold GKF harmless from and against, all negligent,
intentional or wrongful acts or omissions of such physicians, professional,
technical and support personnel.

     16.  Taxes. GKF shall pay all sales or use taxes imposed or assessed in
connection with the purchase of the Equipment and all personal property taxes
imposed, levied or assessed on the ownership and possession of the Equipment
during the Term. All other taxes, assessments, licenses or other charges
imposed, levied or assessed on the Equipment during the Term shall be paid by
Hospital before the same shall become delinquent, whether such taxes are
assessed or would ordinarily be assessed against GKF or Hospital; provided,
however, Hospital shall not be required to pay any federal, state or local
income, franchise, corporation or excise taxes imposed upon GKF’s net income
realized from the lease of the Equipment. In case of a failure by Hospital to
pay any taxes, assessments, licenses or other charges when and as required
under this Section, GKF may pay all or any part of such taxes, in which event
the amount paid by GKF shall be immediately payable by Hospital to GKF upon
written request together with interest thereon at the rate of at the rate of
one and one-half percent (1.50%) per month (or the maximum monthly interest
rate permitted to be charged by law between an unrelated, commercial borrower
and lender, if less) and reasonable attorneys’ fees and costs incurred by GKF
in collecting such amount from Hospital.

     17.  No Warranties by GKF. Hospital warrants that as of the First
Procedure Date, it shall have (a) thoroughly inspected the Equipment, (b)
determined that the Equipment is consistent with the size, design, capacity and
manufacture selected by it, and (c) satisfied itself that to the best of its
knowledge the Equipment is suitable for Hospital intended purposes and is

 

 

good working order, condition and repair. GKF SUPPLIES THE EQUIPMENT
UNDER THIS AGREEMENT IN ITS “AS IS” CONDITION. GKF, NOT BEING THE MANUFACTURER
OF THE EQUIPMENT OR THE MANUFACTURER’S AGENT, MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE EQUIPMENT’S
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, DESIGN, CONDITION,
DURABILITY, CAPACITY, MATERIAL OR WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR
THE LIKE. As between GKF and Hospital, Hospital shall bear all risks with
respect to the foregoing warranties. GKF shall not be liable for any direct,
indirect and consequential losses or damages suffered by Hospital or by any
other person, and Hospital expressly waives any right to hold GKF liable
hereunder for, any claims, demands and liabilities arising out of or in
connection with the design, manufacture, possession or operation of the
Equipment, including injury to persons or property resulting from the failure
of, defective or faulty design, operation, condition, suitability or use of the
Equipment. All warranty or other similar claims with respect to the Equipment
shall be made by Hospital solely and exclusively against persons other than
GKF, including Elekta or any other manufacturers or suppliers. In this regard
and with prior written approval of GKF, Hospital may, in GKF’s name, but at
Hospital sole cost and expense, enforce all warranties, agreements or
representations, if any, which may have been made by Elekta or manufacturers,
suppliers or other third parties regarding the Equipment to GKF or Hospital.
GKF shall not be responsible for the delivery, installation or operation of the
Equipment or for any delay or inadequacy of any or all of the foregoing.

     18.  Termination for Economic Justification. If, following the initial
twenty four (24) months after the First Procedure Date and following each
subsequent 12 month period thereafter during the Term, based upon the
utilization of the Equipment, within a reasonable period of time after GKF’s
written request, Hospital does not provide GKF with a reasonable economic
justification to continue this Agreement and the provision of Gamma Knife
services at the Hospital, then and in that event, GKF shall have the option to
terminate this Agreement by giving a written notice thereof to Hospital not
less than ninety (90) days prior to the effective date of the termination
designated in GKF’s written notice. Such termination shall take place without
penalty to Hospital.

     19.  Options to Extend Agreement. As of the end of the Term, Hospital
shall have the option either to:

          19.1  Extend the Term of this Agreement for a specified period of time and
upon such other terms and conditions as may be agreed upon by GKF and Hospital;

          19.2  Terminate this Agreement as of the expiration of the Term.

Hospital shall exercise one (1) of the two (2) options referred to above by
giving an irrevocable written notice thereof to GKF at least nine (9) months
prior to the expiration of the initial Term. Any such notice shall be
sufficient if it states in substance that Hospital elects to exercise its
option and states which of the three (2) options referred to above Hospital is
exercising. If

 

 

Hospital fails to exercise the option granted herein at least nine (9) months
prior to the expiration of the initial Term, the option shall lapse and this
Agreement shall expire as of the end of the initial Term. Further, if Hospital
exercises the option specified in Section 19.1 above and the parties are unable
to mutually agree upon the length of the extension of the Term or any other
terms or conditions applicable to such extension prior to the expiration of the
Term, this Agreement shall expire as of the end of the initial Term.

     20.  Events of Default by Hospital and Remedies.

          20.1  The occurrence of any one of the following shall constitute an event
of default under this Agreement (an “Event of Default”):

               20.1.1  Hospital fails to pay any rent payment when due pursuant to
Paragraph 8 above and such failure continues for a period of fifteen (15) days
after written notice thereof is given by GKF or its assignee to Hospital;
however, if Hospital cures the rent payment default within the applicable
fifteen (15) day period, such default shall not constitute an Event of Default.

               20.1.2  Hospital attempts to remove, sell, transfer, encumber, assign,
sublet or part with possession of the Equipment or any items thereof, except as
expressly permitted herein.

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

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

               20.1.5  Within sixty (60) days after the commencement of any proceedings
against Hospital seeking reorganization, arrangement, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceedings shall not

 

 

have been dismissed, or if within thirty (30) days after the appointment
without Hospital consent or acquiescence of any trustee, receiver or liquidator
of it or of all or any substantial part of its assets and properties, such
appointment shall not be vacated.

               20.1.6  Hospital is suspended or terminated from participation in the
Medicare program.

          20.2  Upon the occurrence of an Event of Default with respect to Hospital
as defined in Sections 20.1.1, 20.1.2 and 20.1.3, GKF may at its option do any
or all of the actions described in Section 20.2.1, 20.2.2, 20.2.3, 20.2.4 and
20.2.5. Upon the occurrence of an Event of Default with respect to the
Hospital as defined in Sections 20.1.4, 20.1.5 and 20.1.6, GKF may at its
option exercise any or all of the actions described in Sections 20.2.1, 20.2.3,
20.2.4 and 20.2.5.

               20.2.1  By written notice to Hospital, immediately terminate this Agreement
as to the Equipment, wherever situated. As a result of the termination, at
Hospital’s sole cost and expense, GKF may enter upon the Site and remove the
Equipment or GKF may demand that Hospital remove and return the Equipment to
GKF. Other than for GKF’s negligence or willful misconduct, GKF shall have no
liability of any kind or nature in connection with any such removal or
restoration.

               20.2.2  Recover from Hospital as liquidated damages for the loss of the
bargain represented by this Agreement and not as a penalty an amount equal to
the present value of the unpaid estimated future rent payments to be made by
Hospital to GKF through the end of the Term discounted at the rate of nine
percent (9%), which liquidated damages shall become immediately due and
payable. The unpaid estimated future lease payments shall be based on the
prior twelve (12) months rent payments made by Hospital to GKF hereunder with
an annual five (5%) percent increase thereof through the end of the Term.
Hospital and GKF acknowledge that the liquidated damages formula set forth in
this Section 20.2.2 constitutes a reasonable method to calculate GKF’s damages
resulting from an Event of Default arising under Section 20.1.1, 20.1.2 and
20.1.3 under the circumstances existing as of the date of this Agreement.

               20.2.3  Sell, dispose of, hold, use or lease the Equipment, as GKF in its
sole and absolute discretion may determine (and GKF shall not be obligated to
give preference to the sale, lease or other disposition of the Equipment over
the sale, lease or other disposition of similar Equipment owned or leased by
GKF).

               20.2.4  Exercise any other right or remedy which may be available to GKF
under the Uniform Commercial Code or any other applicable law or proceed by
appropriate court action, without affecting GKF’s title or right to possession
of the Equipment, to enforce the terms hereof or to recover damages for the
breach hereof or to cancel this Agreement as to the Equipment.

 

 

               20.2.5  In addition to the foregoing remedies, Hospital shall be liable to
GKF for all reasonable attorneys fees, costs and expenses incurred by GKF as a
result of the Event of Default or the exercise of GKF’s remedies.

          20.3  Upon termination of this Agreement or the exercise of any other
rights or remedies under this Agreement or available under applicable law
following an Event of Default, Hospital shall, without further request or
demand, pay to GKF all rent payments and other sums owing under this Agreement.
In the event that Hospital shall pay the liquidated damages referred to in
Section 20.2.2 above to GKF, GKF shall pay to Hospital within thirty (30) days
after receipt thereof all rentals or proceeds received from the reletting or
sale of the Equipment during the balance of the initial Term (after deduction
of all costs and expenses, including reasonable attorneys fees and costs,
incurred by GKF as a result of the Event of Default), said amount never to
exceed the amount of the liquidated damages paid by Hospital. However,
Hospital acknowledges that GKF shall have no obligation to sell the Equipment.
Hospital shall in any event remain fully liable for all damages as may be
provided by law and for all costs and expenses incurred by GKF on account of
such default, including but not limited to, all court costs and reasonable
attorneys’ fees. The rights and remedies afforded GKF under this Agreement
shall be deemed cumulative and not exclusive, and shall be in addition to any
other rights or remedies to GKF provided by law or in equity.

     21.  Insurance.

          21.1  During the Term, GKF shall, at its cost and expense, purchase and
maintain in effect an all risk property and casualty insurance policy covering
the Equipment. The all risk property and casualty insurance policy shall be
for an amount not less than the replacement cost of the Equipment. Hospital
shall be named as an additional insured party on the all risk property and
casualty insurance policy to the extent of its interest in the Equipment
arising under this Agreement. The all risk property and casualty insurance
policy maintained by GKF shall be evidenced by a certificate of insurance or
other reasonable documentation which shall be delivered by GKF to Hospital upon
request following the commencement of this Agreement and as of each annual
renewal of such policy during the Term.

          21.2  During the Term, Hospital shall, at its cost and expense, purchase
and maintain in effect general liability and professional liability insurance
policies covering the Site (together with all premises where the Site is
located) and the use or operation of the Equipment by Hospital or its officers,
directors, agents, employees, contractors or physicians. The general liability
insurance policy shall provide coverage in amounts not less than One Million
Dollars ($1,000,000.00) per occurrence and Five Million Dollars ($5,000,000.00)
annual aggregate. GKF shall be a certificate holder for general liability
insurance. Professional liability insurance shall be as required by
Pennsylvania Law Act 111 as amended by Act 135. Currently the limits are
$500,000 per occurrence and $2,500,000 in the aggregate for institutional
liability which covers those employees such as nurses, physicists, etc. and the
physician individual limits are $500,000 per occurrence and $1,500,000 in the
aggregate. In addition, coverage is provided by

 

 

the MCARE Fund with limits for each of these provides in the amount of
$500,000 per occurrence and $2,100,000 in the aggregate. Evidence of current
insurance is required by the Medical Staff Bylaws. The policies to be
maintained by Hospital hereunder shall be evidenced by a certificate of
insurance or other reasonable documentation which shall be delivered by
Hospital to GKF no later than the First Procedure Date and as of each annual
renewal of such policies during the Term.

          21.3  During the construction of the Site and prior to the First Procedure
Date, Hospital, at its cost and expense, shall purchase and maintain a general
liability insurance policy which conforms with the coverage amounts and other
requirements described in Section 21.2 above and which names GKF as an
additional insured party. The policy to be maintained by Hospital hereunder
shall be evidenced by a certificate of insurance or other reasonable
documentation which shall be delivered by Hospital to GKF prior to the
commencement of any construction at the Site.

          21.4  During the Term, Hospital shall purchase and maintain all workers
compensation insurance to the maximum extent required by applicable law.

     22.  Indemnification.

          22.1  Hospital shall indemnify, defend, protect and hold GKF and its
members, managers, officers, employees, agents and contractors (collectively
“GKF”) harmless from and against all losses, claims, damages, liabilities,
assessments, deficiencies, actions, proceedings, orders, judgments, liens,
costs and other expenses (including reasonable attorney’s fees) of any nature
or kind whatsoever asserted against or incurred by GKF (collectively “Damages”)
which in any manner arise out of or relate to (a) the failure by Hospital to
fully perform, observe or satisfy its covenants, duties or obligations
contained in this Agreement or in the LGK Agreement; (b) the use and operation
of the Equipment resulting from the negligence or willful misconduct of
Hospital and its employees, contractors, agents, or representatives and or
affiliates during the Term; (c) the design, construction and preparation of the
Site by Hospital or the maintenance of the Site during the Term by Hospital;
(d) Damages to the Equipment from the defective, faulty or improper design,
construction or preparation of the Site or the installation and positioning of
the Equipment; (e) Damages to the Equipment (including any Damages arising out
of or related to violations by Hospital, its agents, officers, physicians,
employees or contractors of the Service Agreement) caused by the negligent or
wrongful acts or omissions of Hospital, its agents, officers, physicians,
employees or contractors (in the event the Equipment is destroyed or rendered
unusable, subject to Section 22.6 below, this indemnity shall extend up to (but
not exceed) the full replacement value of the Equipment at the time of its
destruction less salvage value, if any); (f) the events or occurrences
described in Article 7.3 of the LGK Agreement to the same extent that Hospital
agrees to indemnify Elekta thereunder; and (g) any other matters for which
Hospital has specifically agreed to indemnify GKF pursuant to this Agreement.

 

 

          22.2  Upon the occurrence of an event for which GKF is entitled to
indemnification under this Agreement, GKF shall give written notice thereof to
Hospital setting forth the type and amount of Damages. If the indemnity
relates to a Third Party Claim (as defined in Section 22.3 below), the matter
shall be subject to Section 22.3 below. If the indemnity relates to any
Damages other than a Third Party Claim, not more than thirty (30) days after
GKF’s written notice is given, Hospital either shall acknowledge in writing to
GKF its obligation to indemnify hereunder and pay the Damages in full to GKF or
dispute its obligation to indemnify in a written notice delivered to GKF. If
Hospital disputes the obligation to indemnify, the parties shall meet and
negotiate in good faith to mutually resolve the disagreement regarding
indemnification.

          22.3  GKF shall give written notice to Hospital as soon as reasonably
possible after it has knowledge of any third party claim or legal proceedings
(“Third Party Claim”) for which GKF is entitled to indemnification under this
Section 22. Hospital shall (a) immediately assume, at its sole cost and
expense, the defense of the Third Party Claim with legal counsel approved by
GKF (which approval will not be unreasonably withheld, delayed or conditioned),
and (b) as soon as reasonably possible after GKF’s written notice is given to
Hospital, acknowledge in writing to GKF its obligation to indemnify GKF in
accordance with the terms of this Agreement. If Hospital fails to assume the
defense of a Third Party Claim or fails to timely acknowledge in writing its
obligation to indemnify GKF, GKF may assume the defense of the Third Party
Claim in the manner described in Section 22.4 below. GKF shall cooperate with
Hospital in the defense of any Third Party Claim. Any settlement or compromise
of a Third Party Claim to which GKF is a party shall be subject to the express
written approval of GKF, which approval shall not be unreasonably withheld,
delayed or conditioned as long as an unconditional term of the settlement or
compromise is the full and absolute release of GKF from all Damages arising out
of the Third Party Claim. GKF, at its own cost and expense, may participate on
its own behalf with legal counsel of its own selection in the defense of any
Third Party Claim which may have a material impact on GKF.

          22.4  If Hospital fails to promptly assume the defense of any Third Party
Claim, GKF may assume the defense of the Third Party Claim with legal counsel
selected by GKF, all at Hospital cost and expense. The defense of an action by
GKF under this Section 22.4 shall not impair, limit or otherwise restrict
Hospital indemnification obligations arising under this Section 22 or GKF’s
right to enforce such obligations.

          22.5  The indemnity obligations under this Section 22 shall survive the
termination of this Lease with respect to events occurring during or relating
to the Term.

          22.6  The indemnification obligations set forth in this Agreement are
intended to supplement, and not supersede, supplant or replace, any coverage
for Damages which may be available under any insurance policies that may be
maintained by GKF or Hospital. In the event any Damages may be covered by
insurance policies, the parties shall exercise good faith and use their best
efforts to obtain the benefits of and apply the available insurance coverage to the

 

 

Damages subject to indemnification under this Agreement. In the event
that an insurer provides coverage under an insurance policy on the basis of a
“reservation of rights”, the indemnification obligations under this Agreement
shall apply to all Damages which are finally determined as not being covered
under the insurance policy.

     23.  Miscellaneous.

          23.1  Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Hospital shall not assign this Agreement or any of its rights hereunder or
sublease the Equipment without the prior written consent of GKF, which consent
shall not be unreasonably withheld. An assignment or sublease shall not
relieve Hospital of any liability for performance of this Agreement during the
remainder of the Term. Any purported assignment or sublease made without GKF’s
prior written consent shall be null, void and of no force or effect.

          23.2  Agreement to Perform Necessary Acts. Each party agrees to perform
any further acts and execute and deliver any further documents which may be
reasonably necessary or otherwise reasonably required to carry out the
provisions of this Agreement.

          23.3  Validity. If for any reason any clause or provision of this
Agreement, or the application of any such clause or provision in a particular
context or to a particular situation, circumstance or person, should be held
unenforceable, invalid or in violation of law by any court or other tribunal of
competent jurisdiction, then the application of such clause or provision in
contexts or to situations, circumstances or persons other than that in or to
which it is held unenforceable, invalid or in violation of law shall not be
affected thereby, and the remaining clauses and provisions hereof shall
nevertheless remain in full force and effect.

          23.4  Attorney’s Fees and Costs. In the event of any action, arbitration
or other proceedings between or among the parties hereto with respect to this
Agreement, the non-prevailing party or parties to such action, arbitration or
proceedings shall pay to the prevailing party or parties all costs and
expenses, including reasonable attorneys’ fees, incurred in the defense or
prosecution thereof by the prevailing party or parties. The party which is a
“prevailing party” shall be determined by the arbitrator(s) or judge(s) hearing
the matter and shall be the party who is entitled to recover his, her or its
costs of suit, whether or not the matter proceeds to a final judgment, decree
or determination. A party not entitled to recover his, her or its costs of
suit shall not recover attorneys’ fees. If a prevailing party or parties shall
recover a decision, decree or judgment in any action, arbitration or
proceeding, the costs and expenses awarded to such party may be included in and
as part of such decision, decree or judgment.

          23.5  Entire Agreement; Amendment. This Agreement together with the
Exhibits attached hereto constitutes the full and complete agreement and
understanding between the parties hereto concerning the subject matter hereof
and shall supersede any and all prior written and oral agreements with regard
to such subject matter. This Agreement may be modified or amended only by a
written instrument executed by all of the parties hereto.

 

 

          23.6  Number and Gender. Words in the singular shall include the plural,
and words in a particular gender shall include either or both additional
genders, when the context in which such words are used indicates that such is
the intent.

          23.7  Effect of Headings. The titles or headings of the various paragraphs
hereof are intended solely for convenience or reference and are not intended
and shall not be deemed to modify, explain or place any construction upon any
of the provisions of this Agreement.

          23.8  Counterparts. This Agreement may be executed in one or more
counterparts by the parties hereto. All counterparts shall be construed
together and shall constitute one agreement.

          23.9  Governing Law. This Agreement shall be interpreted and enforced in
accordance with the internal laws, and not the law of conflicts, of the State
of Pennsylvania applicable to agreements made and to be performed in that
State.

          23.10  Exhibits. All exhibits attached hereto and referred to in this
Agreement are hereby incorporated by reference herein as though fully set forth
at length.

          23.11  Ambiguities. The general rule that ambiguities are to be construed
against the drafter shall not apply to this Agreement. In the event that any
provision of this Agreement is found to be ambiguous, each party shall have an
opportunity to present evidence as to the actual intent of the parties with
respect to such ambiguous provision.

          23.12  Representations. Each of the parties hereto represents (a) that no
representation or promise not expressly contained in this Agreement has been
made by any other party hereto or by any of its agents, employees,
representatives or attorneys; (b) that this Agreement is not being entered into
on the basis of, or in reliance on, any promise or representation, expressed or
implied, other than such as are set forth expressly in this Agreement; (c) that
it has been represented by counsel of its own choice in this matter or has
affirmatively elected not to be represented by counsel; (d) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (e) it has full power and authority to
execute, deliver and perform this Agreement, and (f) the execution, delivery
and performance of this Agreement has been duly authorized by all necessary
corporate or other similar action.

          23.13 Non-Waiver. No failure or delay by a party to insist upon the
strict performance of any term, condition, covenant or agreement of this
Agreement, or to exercise any right, power or remedy hereunder or under law or
consequent upon a breach hereof or thereof shall constitute a waiver of any
such term, condition, covenant, agreement, right, power or remedy or of any
such breach or preclude such party from exercising any such right, power or
remedy at any later time or times.

 

 

          23.14  Notices. All notices, requests, demands or other communications
required or permitted to be given under this Agreement shall be in writing and
shall be delivered to the party to whom notice is to be given either (a) by
personal delivery (in which case such notice shall be deemed to have been duly
given on the date of delivery), (b) by next business day air courier service
(e.g., Federal Express or other similar service) (in which case such notice
shall be deemed given on the business day following deposit with the air
courier service), or (c) by United States mail, first class, postage prepaid,
registered or certified, return receipt requested (in which case such notice
shall be deemed given on the third (3rd) day following the date of mailing),
and properly addressed as follows:

	 	 	 
	To GKF:

	 	Craig K. Tagawa
	

	 	Chief Executive Officer
	

	 	GK Financing, LLC
	

	 	Four Embarcadero Center, Suite 3700
	

	 	San Francisco, CA 94111
	

	 	 
	To Hospital:

	 	Teri Guidi
	

	 	Lehigh Valley Hospital
	

	 	Vice President Cancer Services
	

	 	1200 South Cedar Crest Blvd.
	

	 	Allentown, PA 18103

A party to this Agreement may change his, her or its address for purposes of
this Section by giving written notice to the other parties in the manner
specified herein.

          23.15  Special Provisions Respecting Medicare and Medicaid Patients

               23.15.1  Hospital and GKF shall generate such records and make such
disclosures as may be required, from time to time, by the Medicare, Medicaid
and other third party payment programs with respect to this Agreement in order
to meet all requirements for participation and payment associated with such
programs, including but not limited to the matters covered by Section
1861(v)(1)(I) of the Social Security Act.

               23.15.2  For the purpose of compliance with Section 1861(v)(1)(I) of the
Social Security Act, as amended, and any regulations promulgated pursuant
thereto, both parties agree to comply with the following statutory requirements
(a) Until the expiration of four (4) years after the termination of this
Agreement, both parties shall make available, upon written request to the
Secretary of Health and Human Services or, upon request, to the Comptroller
General of the United States, or any of their duly authorized representatives,
the contract, and books, documents and records of such party that are necessary
to certify the nature and extent of such costs, and (b) if either party carries
out any of the duties of the contract through a subcontract with a value or
cost of $10,000 or more over a twelve month period, with a related
organization, such subcontract shall contain a clause to the effect that until
the expiration of four

 

 

(4) years after the furnishing of such services pursuant to such
subcontract, the related organization shall make available, upon written
request to the Secretary, or upon request to the Comptroller General, or any of
their duly authorized representatives the subcontract, and books, documents and
records of such organization that are necessary to verify the nature and extent
of such costs.

          23.16  Force Majeure. Failure to perform by either party will be excused
in the event of any delay or inability to perform its duties under this
Agreement directly or indirectly caused by conditions beyond its reasonable
control, including, without limitation, fires, floods, earthquakes, snow, ice,
disasters, acts of God, accidents, riots, wars, operation of law, strikes,
governmental action or regulations, shortages of labor, fuel, power, materials,
manufacturer delays or transportation problems. Notwithstanding the foregoing,
all parties shall make good faith efforts to perform under this Agreement in
the event of any such circumstance. Further, once such an event is resolved,
the parties shall again perform their respective obligations under this
Agreement.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.

	 	 	 
	“GKF”

	 	GK Financing, LLC,
	

	 	a California limited liability company

	 	 	 	 	 
	 	 	 
	 	By:  	                   /s/ Craig K. Tagawa
 	 
	 	 	Craig K. Tagawa, 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 
	“Hospital”

	 	Lehigh Valley Hospital,
	

	 	a not for profit Pennsylvania corporation

	 	 	 	 	 
	 	 	 
	 	By:  	                   /s/ Teri U. Guidi
 	 
	 	 	Teri U. Guidi, 	 
	 	 	Vice President, Cancer Services 	 
	 
	 	 	 
	 	By:  	                   /s/ Louis L. Liebhaber
 	 
	 	 	Louis L. Liebhaber, 	 
	 	 	Chief Operating Officer

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