exv10w19b



 






Exhibit 10.19b




ASSIGNMENT, ASSUMPTION AND AMENDMENT OF




LEASE AGREEMENT FOR A GAMMA KNIFE UNIT




     This ASSIGNMENT, ASSUMPTION AND AMENDMENT OF LEASE AGREEMENT FOR A GAMMA KNIFE UNIT (this
“Amendment”) is made effective as of the close of business on June 30, 2006 (the “Amendment
Effective Date”) and is entered into by and among Yale-New Haven Ambulatory Services Corporation,
a Connecticut corporation (“ASC”), Yale-New Haven Hospital, Inc. a/k/a Yale-New Haven Hospital, a
Connecticut corporation (“YNHH”) and GK Financing, LLC, a California limited liability company
(“GKF”).



RECITALS




     WHEREAS, on April 10, 1997 GKF and ASC entered into a Lease Agreement For A Gamma Knife Unit
(the “Lease”), which Lease was amended pursuant to an Addendum dated as of October 25, 2005 (the
“Addendum”) (the Lease, as amended by the Addendum, is hereinafter referred to as the “Amended
Lease”);



     WHEREAS, YNHH is an affiliate of ASC, and ASC desires to transfer and assign its interest in
the Amended Lease (as further amended hereby) to YNHH; and



     WHEREAS, ASC, YNHH and GKF desire to further amend the Amended Lease with respect to
reimbursement paid to GKF and certain other provisions and to effect such transfer and assignment.



     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:




	 	1.	 	Definitions. All capitalized terms used but not defined herein have the
meanings given thereto in the Amended Lease. The lease arrangement as amended and assigned
to YNHH hereby is referred to as the “Assigned Lease.”
	 
	 	2.	 	Additional Amendments to the Amended Lease. GKF and ASC agree to amend the
Amended Lease as follows:






	 	a.	 	As of the Amendment Effective Date, Section 7 of the Lease (captioned
“Reimbursement to GKF”) and Section 4 of the Addendum (captioned “Lease Payment to
GKF”) are deleted and of no further force or effect.
	 
	 	b.	 	From and after the Amendment Effective Date, YNHH shall pay to GKF the
monthly “Lease Payments” (as defined below), plus, if applicable, the
“Additional Payments” (as defined below). The Lease Payments shall be payable
within thirty (30) days after the conclusion of each calendar month in which the
applicable procedures were performed. In addition to the Lease Payments and the
Additional Payments, YNHH shall pay to GKF quarterly payments in an amount equal to
one quarter of YNHH’s reasonable projection of the total * due on the Equipment and
paid by GKF for each “Contract Year” (as defined below). Within thirty (30) days
after the end of each Contract Year, the sum of such quarterly projected payments
made by YNHH shall be reconciled against the actual amounts of such expenses, and
YNHH or GKF shall, within thirty (30) days thereafter, make a “true up” payment to
the other as appropriate. Through the term of the Assigned
Lease, and thereafter until final settlement of all amounts owed to or claimed by
either party under the Assigned Lease, each party shall have the right at reasonable
times and upon reasonable advance notice to inspect, audit and copy the other
party’s books and 




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	 	 	 	records which relate to scheduling and billing of, and
reimbursement for, Gamma Knife procedures, the Lease Payments and Additional
Payments, and the * associated with the Equipment. Notwithstanding the foregoing,
the compensation payable to GKF pertaining to procedures performed prior to the
Amendment Effective Date shall be calculated and paid by ASC in accordance with
Section 4 of the Amended Lease.






	 	i.	 	As used herein:






	 	(A)	 	“Lease Payment” shall mean and be equal to *
multiplied by each and every procedure performed after the Amendment
Effective Date during the applicable calendar month using the
Equipment, irrespective of (1) whether the procedure is performed by
YNHH, its representatives or affiliates, or any other person or entity;
or (2) the actual amounts billed or collected, if any, pertaining to
such procedures.
	 
	 	(B)	 	“Affiliate” shall mean as to any YNHH and/or
ASC, (1) any Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with such YNHH and/or ASC, or
(2) any Person who is a director or officer (aa) of YNHH and/or ASC,
(bb) of any subsidiary of YNHH and/or ASC, or (cc) of any Person
described in clause (1) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person
whether through ownership of voting securities, by contract or
otherwise.
	 
	 	 	 	Without limiting the generality of the foregoing, “Affiliate” shall
expressly include the Yale-New Haven Delivery Network and all of its
constituent entities, including, without limitation, Yale-New Haven
Hospital, Yale-New Haven Children’s Hospital, Yale-New Haven
Psychiatric Hospital, Yale-New Haven Ambulatory Services Corp (Temple
Medical Center), Yale-New Haven Independent Practice Association
(IPA), Yale-New Haven Physician Hospital Organization (PHO), and
Medical Center Pharmacy.
	 
	 	 	 	Notwithstanding the foregoing, “Affiliate” shall expressly exclude
(aaa) the Bridgeport Delivery Network, comprised of Bridgeport
Hospital, Ahlbin Rehabilitation Centers, United Visiting Nurse
Association and Bridgeport Hospital Foundation, and (bbb) the
Greenwich Delivery Network comprised of Greenwich Hospital, Greenwich
Physicians Association, Inc., and Greenwich Hospital Hospice
services.
	 
	 	(C)	 	“Contract Year” shall mean each successive
twelve (12) month period commencing from the First Procedure Date.
	 
	 	(D)	 	“Person” shall mean any individual,
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, or other entity of whatever
nature.






	 	ii.	 	If (A) at any time, YNHH, ASC and/or any of their
respective Affiliates purchases, leases or otherwise acquires, directly
or indirectly, an ownership or other interest in one or more additional
Leksell Gamma Knife units (each, an “Additional Unit”) for use or
operation within the State of Connecticut in 




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	 	 	 	addition to the Equipment;
and (B) at any time or from time-to-time thereafter, the number of
procedures performed using the Equipment during any Contract Year is *
shall be prorated if the Contract Year is less than 365 days (a
“Shortfall Contract Year”), then, in addition to the Lease Payments
payable to GKF for procedures performed using the Equipment, YNHH shall
pay to GKF an additional amount (each, an “Additional Payment”) equal to
the sum of * multiplied by each procedure performed using the Additional
Unit(s) during the corresponding Shortfall Contract Year, up to an
aggregate of * (prorated if the subject Contract Year is less than 365
days) combined between procedures performed using the Equipment and
procedures performed using the Additional Unit(s), irrespective of (1)
whether such procedures are performed by YNHH, its representatives or
affiliates, or any other person or entity; or (2) the actual amounts
billed or collected, if any, pertaining to any such procedures. The
Additional Payments shall be paid by YNHH to GKF quarterly in an amount
equal to one quarter of YNHH’s reasonable projection of the aggregate
Additional Payment for the then-current Contract Year. Within thirty
(30) days after the end of each Contract Year, the sum of such quarterly
projected payments made by YNHH shall be reconciled against the actual
Additional Payment payable for the subject Contract Year, and YNHH or GKF
shall, within thirty (30) days thereafter, make a “true up” payment to
the other as appropriate. Nothing set forth herein shall limit or place
a ceiling on the number of procedures that may be performed using the
Equipment or on the Lease Payment that is payable in connection with
procedures performed using the Equipment.






	 	iii.	 	For example, if Additional Unit(s) have been
acquired:






	 	1.	 	Assuming * procedures are performed using
the Equipment during a Contract Year and another * procedures are
performed in the same Contract Year using the Additional Unit(s),
then, the aggregate Lease Payments for that Contract Year would
equal *, and the Additional Payment for that Contract Year would
equal *.
	 
	 	2.	 	Assuming * procedures are performed using
the Equipment during a Contract Year and another * procedures are
performed in the same Contract Year using the Additional Unit(s),
then, the aggregate Lease Payments for that Contract Year would
equal *, and the Additional Payment for that Contract Year would
equal *.
	 
	 	3.	 	Assuming * procedures are performed using
the Equipment during a Contract Year and * procedures are performed
in the same Contract Year using the Additional Unit(s), then, the
aggregate Lease Payments for that Contract Year would equal *, and
the Additional Payment for that Contract Year would equal *.
	 
	 	4.	 	Assuming * procedures are performed using
the Equipment during a Contract Year and * procedures are performed
in the same Contract Year using the Additional Unit(s), then, the
aggregate Lease Payments for that
Contract Year would equal *, and the Additional Payment for that
Contract Year would equal *.





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	 	c.	 	Section 11.1 (captioned “Right of First Refusal”) of the Lease is
hereby deleted and of no further force or effect.
	 
	 	d.	 	YNHH and GKF agree to implement Section 6 (captioned “Marketing
Support”) of the Lease in accordance with the following paragraph:
	 
	 	 	 	Marketing Support. YNHH shall provide reasonable and customary marketing
materials (i.e. brochures, announcements, etc.), marketing support, and
administrative and physician support for this clinical service (i.e. seminars by
neurosurgeons and radiation oncologists to interested physicians and the like). Not
less than ninety (90) days prior to each anniversary of the Amendment Effective
Date, GKF and YNHH 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 mutually approved, the marketing budget and
plan shall be implemented in accordance with its terms. As funds are expended by
YNHH in accordance with the marketing budget and plan, YNHH shall submit invoices
(together with documentary evidence supporting the invoices) for its expenditures
and, promptly following the receipt of such invoices, GKF shall reimburse YNHH for *
of the expenditures up to an annual maximum reimbursement by GKF of *. It is
acknowledged by GKF and YNHH that the expenses to be reimbursed by GKF as provided
in this Section have been reflected in the calculation of the per procedure payment
to be paid to GKF by YNHH pursuant to the first sentence of Section 2.b of this
Amendment, and shall not be taken into account in calculating any obligations of GKF
or YNHH in connection with the payments for property tax, the service and support
agreement and insurance obligations contemplated by such Section 2.b.






	 	3.	 	Assignment and Assumption.






	 	a.	 	ASC hereby (i) transfers, sells, assigns and sets over to YNHH all of
ASC’s right, title and interest in, under and to the Assigned Lease to YNHH, its
successors and assigns, from and after the Amendment Effective Date for the entire
balance of the term of the Assigned Lease, subject to the terms, covenants and
conditions therein contained; and (ii) agrees to keep, carry out and perform of all
of the terms, covenants and conditions of the Amended Lease to be performed by
“Yale” thereunder and arising or accruing at any time prior to the Amendment
Effective Date.
	 
	 	b.	 	ASC hereby agrees to defend, indemnify and hold YNHH harmless from and
against any loss, cost, damage or expense arising out of or in connection with the
Amended Lease accruing up through the Amendment Effective Date.
	 
	 	c.	 	YNHH hereby (i) accepts such assignment, assumes the Assigned Lease,
and agrees to keep, carry out and perform of all of the terms, covenants and
conditions of the Assigned Lease to be performed by “Yale” thereunder and arising
or accruing from and after the Amendment Effective Date, and (ii) agrees to defend,
indemnify and hold ASC harmless from and against any loss, cost, damage or expense
arising out of or in connection with the Assigned Lease accruing from and after the
Amendment Effective Date.
	 
	 	d.	 	GKF hereby (i) consents to such assignment of the Assigned Lease and
the assumption of the Assigned Lease by YNHH; and (ii) agrees to release ASC from
any claim under the Amended Lease or the Assigned Lease first accruing from and
after the Amendment Effective Date.





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	 	4.	 	Address of YNHH for Notices. For the purposes of any notices required by the
Assigned Lease, YNHH’s address and contact shall be:




Yale-New Haven Hospital

20 York Street

New Haven, CT 06510

Fax: (203) 688-6886

Attn.: John Skelly, VP Finance





	 	5.	 	Governing Law. This Amendment shall be governed by and construed under the
laws of the State of Connecticut, without reference to its principles of conflicts of law.
	 
	 	6.	 	Counterparts. This Amendment may be executed in separate counterparts, each of
which when so executed and delivered shall be an original, but all of which counterparts
shall together constitute the same instrument.
	 
	 	7.	 	Captions. The captions and paragraph headings used herein are for convenience
only and shall not be used in construing or interpreting this Amendment.
	 
	 	8.	 	Successors. This Amendment shall inure to the benefit of and be binding upon
the parties and their respective successors and permitted assigns.
	 
	 	9.	 	Full Force and Effect. Except as amended by this Amendment, all of the terms
and provisions of the Amended Lease shall remain in full force and effect.




IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day first written above.




	 	 	 	 	 	 	 	 	 
	YALE-NEW HAVEN AMBULATORY	 	GK FINANCING, LLC	 	 
	SERVICES CORPORATION	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gayle Capozzalo
	 	By:
	 	/s/ Ernest A. Bates, M.D.	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Its:
	 	Executive VP, Strategy and System Development	 	Its:	 	Policy Committee Member	 	 
	 
	 	 	 	 	 	 	 	 
	YALE-NEW HAVEN HOSPITAL, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ John Skelly
 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	VP of Finance	 	 	 	 
	 	 







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