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Exhibit 10.13
AMENDMENT AGREEMENT
This Amendment Agreement is made and entered as of October 26, 1995,
by and between AMERICAN SHARED RADIOSURGERY SERVICES, INC. ("ASRS") and GKV
INVESTMENTS, INC. ("GKV").
WHEREAS, ASRS and GKV are parties to that certain Operating Agreement
for GK Financing, LLC dated as of October 17, 1995 (the "Operating Agreement");
WHEREAS, ASRS and GKV desire to amend the Operating Agreement in
certain respects;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, ASRS and GKV agree as follows:
1. Defined Terms.
All capitalized terms used herein which are defined in the
Operating Agreement shall have the meaning set forth in the Operating
Agreement.
2. Amendment.
Exhibit A of the Operating Agreement shall be deleted and
replaced with Exhibit A attached hereto.
3. Full Force and Effect.
Except as explicitly amended by this Amendment Agreement, the
provisions of the Operating Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the date first above-written.
GKV INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: President
------------------------------
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AMERICAN SHARED RADIOSURGERY
SERVICES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Chairman
------------------------------
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EXHIBIT A
CAPITAL CONTRIBUTION OF MEMBERS OF GK FINANCING, LLC
=======================================================================================================
MEMBER'S
MEMBER'S MEMBER'S MEMBER'S CAPITAL PERCENTAGE
NAME ADDRESS CONTRIBUTION INTEREST
-------------------------------------------------------------------------------------------------------
ASRS See Section 12.12 See below 81%
-------------------------------------------------------------------------------------------------------
GKV See Section 12.12 $232,000 in cash on date of 19%
ASRS's initial contribution of
the UCSF Assets, subject to
Paragraph 12.24 and $495,000 in
cash on date of ASRS's second
contribution of USC Asset,
subject to Paragraph 12.24*
-------------------------------------------------------------------------------------------------------
TOTALS:
=======================================================================================================
* NOTE: Cash amounts to be contributed by GKV may be adjusted as
provided in paragraphs (1) and (3) below.
Initial Capital Contribution by ASRS:
(1) On the effective date of this Agreement or as soon as practical, ASRS
shall transfer to the Company good and marketable title to the Gamma Knife
located at the University of California at San Francisco (subject only to a
financing lease with a current principal balance of approximately $1,237,000
(the "UCSF Lease")), the contract between ASHS/ASRS and the Regents of the
University of California which is located at the University of California at
San Francisco (the "UCSF Contract") relating to the Gamma Knife, and all other
physical and intangible assets relating to the such Gamma Knife (collectively,
("UCSF Assets")) The UCSF Assets shall not include accounts receivable. The
UCSF Assets shall be deemed to have a gross fair market value of approximately
$2,224,000. The exact fair market value of the UCSF Assets shall be determined
as of the date of their transfer to the Company on the basis of the methodology
and assumptions set forth in the existing valuation report by American
Appraisal Associates. The exact amount of cash to be contributed by GKV on the
date on which ASRS transfers the UCSF Assets to the Company shall be equal to
19/81 times the exact net market value of the UCSF Assets as of the date of
their transfer.
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(2) The Company shall assume the obligations of ASRS under the UCSF Lease
and the UCSF Contract which accrue from and after the date on which ASRS
transfer the UCSF Assets to the company, but the Company shall assume no other
obligations of ASRS related to the UCSF Assets, including accounts payable.
ASRS shall indemnify the Company, GKV and their Affiliates for all damages,
costs, expenses, and liabilities (including attorneys' fees) incurred by any of
them in relation to any claims arising from or in relation to the UCSF Assets
prior to the date on which ASRS transfers the UCSF Assets to the Company. Upon
demand by the Company, GKV or their Affiliates, ASRS shall promptly reimburse
the Company, GKV and their Affiliates for attorneys' fees incurred by them
related thereto.
(3) On January 1,1996, or as soon as practical (when ASRS/ASHS has
obtained all required consents/approvals to transfer said asset to Company),
ASRS shall transfer to the Company good and marketable title to the Gamma Knife
located at the USC University Hospital (subject only to a financing lease with
an approximately principal balance as of January 1,1996 of $2,314,000 (the "USC
Leases")), the contract between ASRS and USC University Hospital (the "USC
Contract") relating to the Gamma Knife, and all other physical and intangible
assets relating to such Gamma Knife (collectively, the "USC Assets"). The USC
Assets shall not include accounts receivable. The USC Assets shall be deemed
to have a gross fair market value of approximately $4,426,000. The exact fair
market value of the USC Assets shall be determined as of the date of their
transfer to the Company on the basis of the methodology and assumptions set
forth in the existing valuation report by American Appraisal Associates. The
exact amount of cash to be contributed by GKV on the date on which ASRS
transfers the USC Assets to the Company shall be qual to 19/81 times the exact
net market value of the USC Assets as of the date of their transfer.
(4) The Company shall assume the obligations of ASRS under the USC Lease
and the USC Contract which accrue from and after the date on which ASRS
transfers the USC Assets to the Company, but the Company shall assume no other
obligations of ASRS relating to the USC Assets, including accounts payable.
ASRS shall indemnify the Company, GKV and their affiliates for all damages,
costs, expenses, and liabilities (including attorneys' fees) incurred by any of
them in relation to any claims arising from or in relation to the USC Assets
prior to the date on which ASRS transfers the USC Assets to the Company. Upon
demand by the Company, GKV or their Affiliates, ASRS shall promptly reimburse
the Company, GKV and their Affiliates for attorneys' fees incurred by them
related thereto.
(5) ASRS hereby represents and warrants to the Company and to GKV that the
UCSF Contract, the UCSF Lease, the USC Contract and the USC Lease are in full
force and effect and neither party to each such contract or lease is in breach
thereof and that ASRS has heretofore delivered to GKV true, correct and
complete copies of all such contracts and leases.
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(6) ASRS hereby represents and warrants to the Company and to GKV that
there is no suit, action, claim for investigation pending or threatened
against, affecting or relating to or arising from the UCSF Assets or the USC
Assets, and there exists no basis or grounds for same.
(7) If on a fiscal year basis, the cash flow (defined as revenues less
direct cash operating expenses) generated by the UCSF Assets or the USC Assets,
is insufficient to service the lease payments under the UCSF Lease or the USC
Lease, as the case may be, ASRS shall reimburse the Company in cash for the
difference between said lease payments and said cash flow, without credit to
the Capital Account of ASRS for such payment.
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Exhibit 10.13
SECOND AMENDMENT AGREEMENT
This Amendment Agreement is made and entered as of December 20, 1995,
by and between AMERICAN SHARED RADIOSURGERY SERVICES, INC. ("ASRS") and GKV
INVESTMENTS, INC. ("GKV").
WHEREAS, ASRS and GKV are parties to that certain Operating Agreement
for GK Financing, LLC dated as of October 17, 1995, as amended by that certain
Amendment Agreement dated as of October 26, 1995 (the "Operating Agreement");
WHEREAS, ASRS and GKV desire to amend the Operating Agreement in
certain respects;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, ASRS and GKV agree as follows:
1. Defined Terms.
All capitalized terms used herein which are defined in the
Operating Agreement shall have the meaning set forth in the Operating
Agreement.
2. Amendment.
2.1 Exhibit A of the Operating Agreement shall be deleted
and replaced with Exhibit A attached hereto.
2.2. Paragraph 5.3 of the Operating Agreement is hereby
amended by deleting such paragraph in its entirety and inserting the following
in lieu thereof:
"5.3 GUARANTEED PAYMENTS; DISTRIBUTIONS OF NET CASH FLOW BY
COMPANY
A. For each calendar month listed on Exhibit H
hereto, the Company shall, subject to the provisions of paragraph (2)
of Exhibit A hereto, make a payment to ASRS in the amount set forth
on Exhibit H corresponding to such calendar month. Such payments are
intended to be guaranteed payments within the meaning of section
707(c) of the Code and are referred to herein as the "ASRS Guaranteed
Payments". Each ASRS Guaranteed Payment shall be made on the 17th day
of the calendar month.
B. Subject to any limitations found
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elsewhere in the Agreement and under law including the requirements of
Section 17254 of the Act that the assets of Company after the
distribution be in excess of all liabilities except for liabilities
owed to Members for their capital Contributions as described in
Paragraph 5.6, the Manager shall, with the prior approval of the
Policy Committee, distribute Net Cash Flow as defined below to the
Members as follows: (A) for each calendar month listed on Exhibit I
hereto, the Company shall, subject to the provisions of paragraph (2)
of Exhibit A hereto, distribute an amount of Net Cash Flow set forth
on Exhibit I corresponding to such calendar month 100% to ASRS ("ASRS
Monthly Preferential Cash Flow Distribution"); and (B) the balance of
Net Cash Flow shall be distributed annually in accordance with their
respective Percentage Interests, but only to those persons or entities
recognized on the books of Company as Members or as assignees of
interests on the day of the distribution. With respect to any fiscal
period, Net Cash Flow means all cash of the Company, other than cash
used for ASRS Guaranteed Payments and cash retained for the purposes
of a Working Capital reserve established by the Policy Committee,
including cash from operations, financing, refinancing, exchange or
other disposition of Company assets (other than upon the dissolution
of the Company) (all as determined by the Manager as directed by the
Policy Committee); provided, however, (i) that no distribution of cash
will be made (except for ASRS Guaranteed Payments and ASRS Monthly
Preferential Cash Flow Distributions) until all amounts loaned by any
Member, if any (and all interest with respect to such amounts) have
been repaid in full; and (ii) that no distribution shall be made which
is in violation of any security or lending agreement with a third
party, or which would occur at a time prior to repayment in full of
any debt of the Company, if any, to any Member."
2.3. The Operating Agreement shall be amended by adding
Exhibit H and Exhibit I attached hereto.
3. Full Force and Effect.
Except as explicitly amended by this Second Amendment
Agreement, the provisions of the Operating Agreement shall remain in full force
and effect.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the date first above-written.
GKV INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: President
------------------------------
AMERICAN SHARED RADIOSURGERY
SERVICES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Chairman
------------------------------
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EXHIBIT A
CAPITAL CONTRIBUTION
========================================================================================================
MEMBER'S
MEMBER'S MEMBER'S MEMBER'S CAPITAL PERCENTAGE
NAME ADDRESS CONTRIBUTION INTEREST
--------------------------------------------------------------------------------------------------------
ASRS See Section 12.12 See below 81%
--------------------------------------------------------------------------------------------------------
GKV See Section 12.12 $232,000 in cash on date of 19%
ASRS's initial contribution of
the UCSF Assets, subject to
Paragraph 12.24 and $495,000 in
cash on date of ASRS's second
contribution of USC Asset,
subject to Paragraph 12.24*
--------------------------------------------------------------------------------------------------------
TOTALS:
========================================================================================================
* NOTE: Cash amounts to be contributed by GKV may be adjusted as
provided in paragraphs (1) and (3) below.
Initial Capital Contribution by ASRS:
(1) Not later than December 31, 1995, ASRS shall transfer to the Company
good and marketable title to the Gamma Knife located at the University of
California at San Francisco (subject only to a financing lease with a current
principal balance of approximately $1,237,000 (the "UCSF Lease")), the contract
between ASHS/ASRS and the Regents of the University of California which is
located at the University of California at San Francisco (the "UCSF Contract")
relating to the Gamma Knife, and all other physical and intangible assets
relating to such Gamma Knife (collectively, ("UCSF Assets")) the UCSF Assets
shall not include accounts receivable. The UCSF Assets shall be deemed to have
a gross fair market value of approximately $2,224,000. The exact fair market
value of the UCSF Assets shall be determined as of the date of their transfer
to the Company on the basis of the methodology and assumptions set forth in the
existing valuation report by American Appraisal Associates. The exact amount
of cash to be contributed by GKV on the date on which ASRS transfers the UCSF
Asset to the Company shall be equal to 19/81 times the exact net market value
of the UCSF Assets as of the date of their transfer. The capital account of
ASRS shall be credited with an amount equal to the gross fair market value of
the UCSF Assets when the UCSF are transferred by ASRS to the Company.
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(2) The Company shall assume the obligations of ASRS under the UCSF
Contract which accrue from and after the date on which ASRS transfers the UCSF
Assets to the Company, but the Company shall assume no other obligations of
ASRS related to the UCSF Assets, including the UCSF Lease and accounts payable.
ASRS shall make (or cause to be made) all remaining payments and perform all
other remaining obligations of lessee under the UCSF Lease and shall indemnify
the Company, GKV and their affiliates in relation to such payments and other
obligations. If ASRS fails to make (or to cause to be made) a payment under
the UCSF Lease by the due date thereof (or by the end of any applicable cure
period provided for in the UCSF Lease), then, notwithstanding the provisions of
paragraph 5.3 of the Operating Agreement, no further payments of ASRS
Guaranteed Payments or ASRS Monthly Preferential Cash Flow Distributions shall
thereafter be made. ASRS shall indemnify the Company, GKV and their
Affiliates for all damages, costs, expenses, and liabilities (including
attorneys' fees) incurred by any of them in relation to any claims arising from
or in relation to the UCSF Assets prior to the date on which ASRS transfers the
UCSF Assets to the Company. Upon demand by the Company, GKV and their
Affiliates, ASRS shall promptly reimburse the Company, GKV and their Affiliates
for attorneys' fees incurred by them related thereto.
(3) ASRS represents and warrants that it has an option (the "USC Option")
to purchase from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇') the Gamma Knife located at the USC
University Hospital (subject only to a financing lease with an approximate
principal balance as of January 1, 1996 of $2,314,000 (the"USC Leases")), the
contract between ▇▇▇▇▇ and USC University Hospital (the "USC Contract")
relating to the Gamma Knife, and all other physical and intangible assets
relating to such Gamma Knife (collectively, the "USC Assets"). The USC Assets
shall not include accounts receivable. The consideration for the purchase of
the USC Assets pursuant to the USC Option is the assumption of the obligations
of ▇▇▇▇▇ under the USC Lease. On January 1, 1996, ASRS shall transfer good and
marketable title to the USC Option to the Company.
(4) The Company shall exercise the USC Option and purchase the USC Assets
from ▇▇▇▇▇. The Company shall assume the obligations of ▇▇▇▇▇ under the USC
Lease and the USC Contract which accrue from and after the date on which ▇▇▇▇▇
transfers the USC Assets to the Company, but the Company shall assume no other
obligations of ASRS or ▇▇▇▇▇ relating to the USC Assets, including accounts
payable. ASRS shall indemnify the Company, GKV and their Affiliates for all
damages, costs, expenses, and liabilities (including attorney's fees) incurred
by any of them in relation to any claims arising from or in relation to the USC
Assets prior to the date on which ▇▇▇▇▇ transfers the USC Assets to the
Company. Upon demand by the Company, GKV or their Affiliates, ASRS shall
promptly reimburse the Company, GKV and their Affiliates for attorneys' fees
incurred by them related thereto.
(5) The USC Assets shall be deemed to have a gross fair market value of
approximately $4,426,000. The exact fair market value of the USC Assets shall
be determined as of the date of their transfer to the Company on the basis of
the methodology and assumptions set forth in the existing valuation report by
American Appraisal Associates. The exact amount of cash to be contributed by
GKV on the date on which ASRS transfers the USC Assets to the Company shall be
equal to 19/81 times the exact net market value of the USC Assets as of the
date of their transfer. The net market value of the USC Assets (and the fair
market value of the USC Option) shall be equal to the gross fair market value
of the USC Assets less the outstanding principal
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balance of the USC Lease as of the date of transfer of the USC Option to the
Company. The capital account of ASRS shall be credited with the fair market
value of the USC Option.
(6) ASRS hereby represents and warrants to the Company and to GKV that the
UCSF Contract, the UCSF Lease, the USC Option, the USC Contract and the USC
Lease are in full force and effect and neither party to each such contract or
lease is in breach thereof and that ASRS has heretofore delivered to GKV true,
correct and complete copies of all such contracts and leases as well as the USC
Option.
(7) ASRS hereby represents and warrants to the Company and to GKV that
there is no suit, action, claim or investigation pending or threatened against,
affecting or relating to or arising from the UCSF Assets or the USC Assets and
there exists no basis or grounds for same.
(8) If on a fiscal year basis, the cash flow (defined as revenues less
direct cash operating expenses) generated by the USC Assets is insufficient to
service the lease payments under the USC Lease or the cash flow generated by
the UCSF Assets is insufficient to make the ASRS Guaranteed Payments and the
ASRS Monthly Preferential Cash Flow Distribution, ASRS shall reimburse the
Company in cash for the difference, without credit to the Capital Account of
ASRS for such payment.
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EXHIBIT H
--------------------------------------------------------------------------------------------------------------
ASRS GUARANTEED PAYMENTS
--------------------------------------------------------------------------------------------------------------
Payment Due 17th of month Amount of ASRS Guaranteed Payment
Number
--------------------------------------------------------------------------------------------------------------
1 Jan-96 $5,692.00
--------------------------------------------------------------------------------------------------------------
2 Feb-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
3 March-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
4 April-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
5 May-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
6 June-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
7 July-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
8 Aug-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
9 Sept-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
10 Oct-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
11 Nov-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
12 Dec-96 $8,414.68
--------------------------------------------------------------------------------------------------------------
13 Jan-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
14 Feb-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
15 March-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
16 April-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
17 May-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
18 June-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
19 July-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
20 Aug-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
21 Sept-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
22 Oct-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
23 Nov-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
24 Dec-97 $5,062.34
--------------------------------------------------------------------------------------------------------------
25 Jan-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
26 Feb-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
27 March-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
28 April-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
29 May-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
30 June-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
31 July-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
32 Aug-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
33 Sept-98 $1,703.90
--------------------------------------------------------------------------------------------------------------
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EXHIBIT I
--------------------------------------------------------------------------------------------------------------
ASRS MONTHLY PREFERENTIAL CASH FLOW DISTRIBUTIONS
--------------------------------------------------------------------------------------------------------------
Payment Due 17th of month Amount of ASRS Monthly Cash Flow
Number Distribution
--------------------------------------------------------------------------------------------------------------
1 Jan-96 $17,090.00
--------------------------------------------------------------------------------------------------------------
2 Feb-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
3 March-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
4 April-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
5 May-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
6 June-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
7 July-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
8 Aug-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
9 Sept-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
10 Oct-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
11 Nov-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
12 Dec-96 $31,788.27
--------------------------------------------------------------------------------------------------------------
13 Jan-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
14 Feb-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
15 March-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
16 April-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
17 May-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
18 June-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
19 July-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
20 Aug-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
21 Sept-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
22 Oct-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
23 Nov-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
24 Dec-97 $35,140.61
--------------------------------------------------------------------------------------------------------------
25 Jan-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
26 Feb-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
27 March-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
28 April-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
29 May-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
30 June-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
31 July-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
32 Aug-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
33 Sept-98 $38,499.05
--------------------------------------------------------------------------------------------------------------
