ADDENDUM TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT
Exhibit 10.19a
ADDENDUM TO
This ADDENDUM TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT (the “Addendum”) is made effective as
of October 25, 2005 (the “Effective Date”), and is entered into by and between YALE-NEW HAVEN
AMBULATORY SERVICES CORPORATION, a Connecticut corporation (“Yale”), and GK FINANCING, LLC, a
California limited liability company (“GKF”), with reference to the following recitals.
RECITALS
A. On April 10, 1997, GKF and Yale entered into a Lease Agreement For A Gamma Knife Unit (the
“Lease”).
B. Section 15 of the Lease provides that the parties may discuss and mutually agree upon the
upgrading or reloading of the Equipment.
C. The parties have agreed to upgrade and reload the Equipment, and desire to amend the terms
of the Lease to set forth the terms and conditions of such upgrading and reloading of the
Equipment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. Defined Terms. Unless otherwise defined herein, the capitalized terms used herein
shall have the same meanings set forth in the Lease.
2. Extension of Lease Term. Notwithstanding Section 15 of the Lease, in consideration
for the “Upgrade and Reload” (as defined below), the Term of the Lease is hereby extended to the
earlier to occur of the following dates: (a) the date on which the Equipment is ready to be
accepted for installation at the new Yale-New Haven Cancer Center currently being planned for
construction (which acceptance date is anticipated to be July 1, 2009); or (b) January 1, 2010;
provided that in no event shall GKF have any obligation to remove, relocate and/or
reinstall the Equipment and/or the leasehold improvements to or at the new Yale-New Haven Cancer
Center and/or to repair or restore the existing Site. All references in the Lease to the “Term”
shall be deemed to refer to the Term as extended hereby.
3. Upgrade and Cobalt Reload of the Equipment. Subject to the terms and conditions
set forth below, GKF shall upgrade the Equipment to a Leksell Gamma Knife Model 4C (the “Model 4C”)
and reload the Equipment (as upgraded) with new cobalt-60 (the “Upgrade and Reload”), which Upgrade
and Reload shall be performed at the Site and shall include any required installation and rigging.
The Upgrade and Reload shall be subject to the following:
-1-
Exhibit 10.19a
a. All actual costs and expenses (without markup or inclusion of administrative
overhead) pertaining to the upgrade of the Equipment to the Model 4C shall be paid and/or
reimbursed * as and when incurred, including, without limitation, any costs and expenses
pertaining to Site preparation, installation, rigging and/or obtaining of “Permits” (as
defined below), irrespective of whether incurred in connection with the upgrade and/or the
reloading of the Equipment. Yale shall be solely responsible for obtaining all licenses,
permits, approvals, consents and authorizations necessary and appropriate for the Upgrade
and Reload, including, without limitation, the proper handling of the cobalt-60
(collectively, the “Permits”). It is acknowledged that, as of October 13, 2005, *.
b. Except as provided in subsection 3.a above, all actual costs and expenses incurred
by the parties (without markup or inclusion of administrative overhead) pertaining to the
reloading of the Equipment shall be borne by GKF and Yale as and when incurred, in the same
proportions as net technical revenues are currently allocated under the Lease as in effect
immediately prior to the execution of this Addendum, i.e.: *. It is acknowledged
that, as of October 13, 2005, GKF and Yale have paid *, respectively, toward the costs of
reloading.
c. If applicable, a party shall pay or reimburse any amount owed to the other party in
accordance with the foregoing allocations within ten (10) days following receipt of a
written statement from the other party. Each party shall have the right to inspect, audit
and copy the other party’s books and records pertaining to the costs and expenses incurred
in connection with the Upgrade and Reload.
d. Yale, at Yale’s sole cost and expense, shall provide GKF with Yale personnel
(including Yale physicists) and services upon request and as required by GKF, among other
things, to oversee, supervise and assist with construction and compliance with local, state
and federal regulatory requirements and with nuclear regulatory compliance issues and the
calibration of the Model 4C.
e. The Upgrade and Reload shall be performed by GKF as soon as practical after the
Permits have been obtained. The timing and procedure for the Upgrade and Reload shall be
as mutually agreed upon between the parties which is anticipated but not guaranteed to be
performed in or around December 2005.
f. Immediately following the Upgrade and Reload, all references in the Lease to the
“Equipment” shall be deemed to mean the Model 4C. Notwithstanding anything to the contrary
contained herein, GKF makes no representation or warranty to Yale concerning the Upgrade
and Reload, and GKF shall have no obligation to pay any damages to Yale resulting
therefrom.
4. Lease Payment to GKF.
a. In consideration for the payment by Yale of * pertaining to the upgrade of the Equipment as
set forth above, effective from and after the date on which
-2-
Exhibit 10.19a
the first billed Procedure is performed using the Model 4C (as reloaded) (the “New First
Procedure Date”) through the duration of the Term of the Lease (as extended), GKF’s pro-rata share
of net technical component revenues associated with Gamma Knife treatment less Direct Operating
Expenses associated with providing Gamma Knife treatment (the “GKF Percentage”), as set forth in
Section 7 of the Lease, shall be amended to equal approximately *, subject to adjustment for actual
installation costs incurred by Yale in connection with the upgrade of the Equipment (without markup
or inclusion of administrative overhead), as reasonably approved by both parties.
b. Notwithstanding the New Procedure Date, the compensation payable to GKF for the lease of
the Equipment pertaining to Procedures performed prior to the New First Procedure Date, shall be
calculated and paid in accordance with the same GKF Percentage in effect immediately prior to this
Addendum *, irrespective of whether the technical component revenues or Direct Operating Expenses
pertaining to such Procedures are collected or paid after the New First Procedure Date.
c. Notwithstanding anything to the contrary set forth in the Lease, following the termination
or expiration of the Lease, and within ten (10) days following the end of each month (or portion
thereof) thereafter, Yale shall continue to pay compensation to GKF for Procedures performed during
the Term of the Lease until all technical fees billed for all such Procedures have been collected
by Yale, its agents, representatives or affiliates or until the date that is eighteen (18) months
following the termination or expiration of the Lease (as extended), whichever occurs first (the
“Post-Termination Period”); provided that, for purposes of calculating the compensation to
be paid to GKF during the Post-Termination Period, no Direct Operating Expenses shall be deemed to
have been incurred by either party during such period.
5. No Responsibility for Additional Upgrades or Reloading. It is understood by the
parties that GKF is not responsible for any additional upgrades, hardware, cobalt reloading,
software changes and/or other modifications to the Model 4C except as expressly set forth herein or
otherwise agreed upon in writing by Yale and GKF.
6. Option To Purchase GKF’s Ownership Interest In The Equipment.
a. Upon the expiration of the Term of the Lease (as extended), Yale shall have the option to
purchase GKF’s ownership interest in the Equipment (the “Purchase Option”) for a purchase price of
* (the “Option Purchase Price”). The Option Purchase Price shall be paid in full in cash to GKF
upon the expiration of the Term of the Lease (as extended), upon which GKF shall quitclaim all of
its right, title and interest to Yale, on an “as is, where is” basis, without representation or
warranty, with all faults. Upon the expiration or termination of the Lease, it is understood that
GKF shall have no obligation with respect to the removal, relocation, reinstallation and/or repair
of the Equipment and/or the leasehold improvements.
b. The Purchase Option may be exercised by Yale by giving GKF written notice thereof, which
notice shall be received by GKF not less than ninety (90) days prior to the expiration of the Term
of the Lease (as extended). Such written notice
-3-
Exhibit 10.19a
may be delivered by hand or sent by certified mail, return receipt requested to GKF at the
following address: GK Financing, LLC, Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX
00000, Attn: Xx. Xxxxx X. Xxxxxx, Chief Executive Officer.
c. Concurrently with the execution of this Addendum, Yale shall deposit with GKF the sum of *
(the “Deposit”), which Deposit shall be credited towards the payment of the Option Purchase Price,
if applicable. If the Purchase Option is not exercised by Yale, then, within ten (10) days
following the expiration of the Lease, GKF shall return the Deposit to Yale. The Deposit shall not
bear interest and may be commingled with GKF’s general funds.
7. Captions. The captions and paragraph headings used herein are for convenience only
and shall not be used in construing or interpreting this Addendum.
8. Full Force and Effect. Except as amended and/or supplemented by this Addendum, all
of the terms and provisions of the Lease shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum effective as of the date first
written above.
| GK FINANCING, LLC | YALE-NEW HAVEN AMBULATORY SERVICES CORPORATION |
|||
| By: | /s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxxx Xxxxxxxxx | |
| Name: | Xxxxx X. Xxxxxx | Name: | Xxxxx Xxxxxxxxx | |
| Title: | Chief Executive Officer | Title: | President/CEO | |
-4-
