Exhibit 10.2c
AMENDMENT TO
LEASE AGREEMENT FOR A GAMMA KNIFE UNIT
This AMENDMENTTOLEASE AGREEMENTFOR A GAMMA KNIFEUNIT (this “Amendment”) is madeeffective December 13,2003 (the “EffectiveDate”), byandbetweenMethodist Healthcare System of SanAntonio, Ltd., d/b/a Southwest Texas Methodist Hospital,aTexas Corporation (“Hospital”), and GK Financing, LLC,aCalifornialimited liabilitycompany (“GKF”).
RECITALS
WHEREAS, onOctober29,1996,GKF and Hospital executed a LeaseAgreementfor a Gamma Knife Unit, and anAddendum dated October31,1996(collectively,the“Original Lease”);
WHEREAS,the parties desire toamendthe termsandprovisionsofthe OriginalLease as set forth herein.
NOW, THEREFORE,in consideration of the mutual covenantsand agreements set forthherein,and forothergood and valuableconsideration, thereceiptandsufficiency of which areherebyacknowledged,the partiesagree as follows:
AGREEMENT
1. Defined Terms.Unless otherwisedefined herein, thecapitalizedterms used herein shallhave thesamemeaningsetforth in theOriginal Lease.
2. Lease Extension.Theoriginalten(10) year Gamma Knife ServiceTermset forth inParagraph3 oftheOriginal Lease shall be extended for an additionaltwo(2) yearsplus the numberofdays theEquipmentisnot available for clinicaluse duringCobaltreloading(the “CobaltReloading Period”).The CommencementDate of theGamma Knife Service Term was March17, 1998,andtheCobaltReloading Periodconsisted oftwenty-two(22)days. Accordingly,thedateon whichtheGammaKnifeService Term expires shall be extended from March16,2008to April7, 2010, (whichincludes theCobaltReloadingPeriod).
3. Cobalt Reload.The existing Cobalt-60 wasremovedfrom, andnewCobalt-60 reloadedinto, theEquipmentduring theCobaltReloadingPeriodcommencingon or aboutDecember 13,2003.The coststo removeandreloadCobalt-60 ontheEquipment shallbe thesole responsibility of GKF.
4. Paragraph 5oftheOriginal Lease shallbe deletedinitsentirety.
5. Marketing Support.Paragraph 6of theOriginal Lease shallbe deleted in itsentirety andreplacedwiththefollowing:
Per Procedure Payments.As itssoleconsideration for the lease of theEquipmentand the provision of administrative support, Hospitalshallpay GKF the per procedure paymentofeight thousand five hundred dollars($8,500)for each procedure that is performed using theEquipmentduring the first five (5)years ofthis Agreementstartingfrom theCommencementDate(i.e.,from March17,1998through March16,2003).
“The per procedure payments during thesixth (6th) year ofthis Agreementas extendedby theCobaltReloading Period (i.e., from March 17, 2003 through April 7, 2004)shallbe determinedasfollows:
| “Annual Procedures | Per Procedure Payment |
| 1-100 | $8,200 |
| 101-125 | $7,000 |
| 126- 150 | $6,000 |
| 151+ | $5,000 |
“Theper procedure payments during theseventh (7th) year ofthis Agreement and during eachsubsequent yearthereafter through the expiration of this Agreement (i.e., from April8, 2004through April 7, 2010)shallbe determined as follows:
| “Annual Procedures | Per Procedure Payment |
| 1-150 | $5,242 (or $5,800 if applicable pursuant to Section 8(e) below) |
| 151+ | $4,000 |
“Notwithstandinganythingto thecontrary setforth herein, (a) for purposes of determining the per procedure payment, the number of annual procedures performed shall be resetto zero(0) on March 17, 2003,onApril 8, 2004, and on each April3ththereafter through the expirationofthis Agreement;and (b)thereshallbe no retroactiveadjustmentof the per procedure payment irrespective of whether the number of procedures performed reaches alowerper procedure paymentlevel.Forexample, if155procedures are performed during the eighthyear,Hospital would pay $5,242 for eachofthe first 150 procedures, and $4,000 for eachofthe next five procedures(i.e., forprocedures151through155).
“If no procedures are performed utilizing theEquipment,no chargesshallbe incurred by Hospital.
“A procedureshallbe definedasasinglepatient treatmentsessionthat may include one or more isocenters during thatsession.Hospital shallbe billedonthe fifteenth(15th) andthe last dayof eachmonthfortheactual number of procedures performedduring thefirst and second half ofthemonth, respectively. Hospital shall pay theproceduresinvoiced within thirty (30) days after being invoiced. Interest shall accrue at the rate of1-1/2%per month on all invoices remaining unpaid after45days.”
| 6. | Paragraph 8(e) oftheOriginal Lease shallbe deleted in itsentirety and replaced with the following: |
| (e) | Use best efforts to develop and implement an ongoing marketing program that is specific to the Equipment (the “Marketing Program”), which shall include, withoutlimitation(i) providingreasonableand customary marketing materials(i.e.,brochures, announcements, seminars forphysiciansby neurosurgeons and radiationtherapists,etc.) for the Gamma Knife serviceto beoperated by the Hospital; and (ii) employing anindividual,who shallbeemployed only after consultation with GKF, whoseprimaryresponsibility shallbe toprovidemarketingservices for the Gamma Knife service to be operated bytheHospital (the “Marketing Employee”). All of the costs and expenses of the Marketing Program,including,withoutlimitation,all compensation paid to the Marketing Employee, shallbeborne solelybyHospital. |
The Marketing Program including, withoutlimitation,all advertisements, brochures and other marketing materials, shall be subject to review by GKF prior to their use. Hospital and GKF shall discuss the Marketing Program on a regularbasis,which shallbe not less thanonce permonth.Intheevent Hospitalmateriallyfails toprovide marketing efforts under the Marketing Program generally consistent with the level and scope of such efforts, as made by Hospital duringits2003 fiscal year, and such material failure continues for atleastthirty (30) calendar days, GKF atisoptionmayeither (i)terminate thisAgreementuponproviding Hospital with thirty (30) calendardayswritten notice;or (ii) uponprovidingfifteen (15) calendar days written notice to Hospital, increase the per procedurepaymentsowed by Hospital from $5,242 per procedure to$5,800 perprocedurefor each ofthefirst onehundredfifty(150) proceduresduring theseventh(7th)year ofthisAgreement andduringeach subsequent yearthereafter through theexpiration of this Agreement(i.e.,from April 8, 2004throughApril 7, 2010) subjectto theprocedures set forthinSection 6 ofthisAgreement.
| 6. | Paragraph17of the Original Lease shall be deleted initsentirety and replaced withthefollowing: |
“(a) Hospital shall havetheoption, exercisable as set forth below to:
“(i)RenegotiatethisAgreementonterms mutuallyagreeabletoGKF for a specifiedrenewaltermtaking intoaccountthefirst twelve (12) years of activity oftheEquipment attheSite.Pursuant to Paragraph17(a)(ii),if terms and conditions of an extension are not executed by both parties bytheend oftheeleventh (11th) year oftheGamma Knife Service Term (as extended by the Cobalt Reloading Period (i.e., April 7, 2009), thisAgreementshallterminate. Bothparties shallnegotiatein good faith onthe termsand conditions of an extension ofthisAgreement.
“(ii) Terminate this Agreement. If Hospital failstorenew this Agreement asprovidedin Paragraph17(a)(i)above, GKF shall, atitssole expense removetheGamma Knife within a reasonable period oftimeaftertheexpiration oftheGamma Knife Service Term.Hospital shall cooperate in good faithinsuch removal.
“(iii)Purchase theEquipment from GKF at the end of the Gamma Knife Service Term, at a price equaltoOneDollar($1.00)ifatleastonethousandsevenhundred(1,700) paid procedures have beenperformedduring the Gamma Knife Service Term.
“(iv) PurchasetheEquipment from GKF at the end oftheGamma Knife Service Term at a price equalto80% ofitsFair Market Value. Should Hospital pay for the costtoreloadtheCobalt on the Equipment duringtheoriginal Gamma Knife Service Term, any increaseinEquipment value attributed to Cobalt reloading will be excluded from determining the Equipment's Fair Market Value.
“Hospital shall exercise one (1) ofthefour (4)options referredtoabove, by mailing anirrevocablewrittennoticethereof to GKF at Four Embarcadero Center, Suite 3700, San Francisco, California,94111, by certifiedmail,return receipt requested, postmarked on or before the end of the eleventh (11th)yearof the Gamma Knife Service Term(asextended by the Cobalt Reloading Period(i.e.,April 7, 2009). Any such noticeshallbesufficientif itstatesin substance that Hospital elects to exercise its option andstateswhich of the four(4)options referred to above Hospital is exercising.
7. Full Force and Effect.Exceptas otherwise amended hereby or provided herein, all of the terms and provisions of the Original Lease shall remain in full force and effect. Notwithstanding the foregoing, to the extent of any conflict or inconsistency between the termsandprovisions of this Amendment and that of the OriginalLease,thetermsand provisions of this Amendmentshallprevail and control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of theEffectiveDate.
| “HOSPITAL” | | “GKF” |
| | | |
Methodist Healthcare System of San Antonio, Ltd, d/b/a Southwest Texas Methodist Hospital | | GK Financing, LLC |
| | | | By: | /s/Craig K. Tagawa |
| By: | /s/James C. Scoggin, Jr. | | | Craig K. Tagawa |
| Name: | James C. Scoggin, Jr. | | | Chief Executive Officer |
| Title: | Executive Vice President | | | |
| | | |
| Approved as to Form: | | |
| | | | |
| By: | /s/Elizabeth Henry | | |
| | Elizabeth Henry | | |
| | General Counsel | | |
