Document:

Exhibit 10.8

 

LEASE AGREEMENT FOR
A GAMMA KNIFE UNIT

 

THIS
AGREEMENT FOR A GAMMA KNIFE UNIT (hereinafter referred
to as the “Agreement”), dated December 11,
1996, is entered into between GK FINANCING, LLC, a California
Limited Liability Company (hereinafter referred
to as “GKF”),
and THE COMMUNITY HOSPITAL GROUP, INC., dba JFK MEDICAL CENTER, a New Jersey corporation (hereinafter referred to as “JFK”).

 

RECITALS

 

WHEREAS,
JFK wants to lease a Leksell Stereotactic
Gamma Unit, Model 23004, Type B, manufactured by Elekta
Instruments, Inc. (hereinafter referred to as the “Equipment”);

 

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 JFK pursuant to
the terms and conditions of this Agreement.

 

NOW, THEREFORE,
in consideration of the foregoing premises and the promises contained herein, the parties hereto hereby agree as follows:

 

1.            Execution
of LGK Agreement by and between JFK and Elekta.
JFK agrees that simultaneously with the execution of this Agreement it shall execute that certain LGK Agreement with Elekta (hereinafter
referred to as the “LGK Agreement”), a copy
of which is attached hereto as Exhibit 1
and incorporated herein by this reference. JFK agrees to fulfill all of its
obligations under the LGK Agreement and acknowledges that GKF is a third party beneficiary
of the LGK Agreement. JFK shall fully indemnify and hold
harmless GKF in the event that GKF suffers any loss, damage,
claim or expense (including reasonable attorneys ' fees)
solely as a result of JFK's breach
of the LGK Agreement. Subject
to the consent of Elekta, GKF hereby sublicenses the
LGK Software (as said term is defined in the LGK Agreement)
to JFK.

 

2.            Certificate
of Need (CON). It is understood that JFK requires a CON to install and operate the Equipment. JFK will work diligently toward
receipt of a CON for the Equipment and the provision of
services related thereto. This Agreement shall
become null and void in
the event JFK does not receive a CON for the Equipment and
the provision of services related thereto after
using its best efforts to do so.

 

3.            Delivery
of the Equipment and Site Preparation.
GKF shall arrange in coordination with Elekta to have
the Equipment delivered to JFK at 65 James Street, Edison, New
Jersey (the “Site”) on a date specified
in a separate written
agreement of the parties. GKF shall
exert its best efforts to expedite the delivery of the
Equipment in accordance with the terms and conditions of the Purchase Agreement for the Equipment
by and between GKF and Elekta, a
copy of which is attached hereto as Exhibit 2. Unless
otherwise agreed upon in writing by GKF and JFK, the
Equipment to be delivered to JFK
on the delivery date shall be
the Leksell Gamma Knife unit, Model
23004, Type B, described in the LGK Agreement. Notwithstanding
the foregoing, it is understood and agreed that
GKF has made no representations
and warranties to JFK concerning actual delivery
date or schedule for the Equipment
at the Site.

 

     

     

    

  

JFK
shall provide a safe and properly prepared Site, at its own
expense, in accordance with all of Elekta's
technical instruments (if any), written specifications
(if any) and Site Planning Criteria (which Site Planning
Criteria are attached as Exhibit B to the LGK Agreement
(Exhibit l attached
hereto) and incorporated herein by this reference). Any
written specifications not attached as an exhibit to this
Agreement shall be delivered to JFK in
a timely fashion in order
to permit JFK to take such specifications into account
i n the planning for the
preparation of the Site. The location of
the Site shall be acceptable to
GKF. JFK shall prepare, at
its sole cost and expense, the
requisite plans and specifications for the Site
and shall submit them to Elekta and GKF for approval, which
approval shall not be unreasonably withheld, conditioned
or delayed. JFK shall obtain, in a
timely manner, a User License from the Nuclear Regulatory Commission
and/or appropriate state agency authorizing it to take possession of
the Cobalt supply and shall obtain such other licenses,
permits, approvals, consents and
authorizations, which may be required by local governmental
or other regulatory agencies for the Site, its
preparation, the charging of the Equipment
with its Cobalt supply, the
conduct of acceptance tests, and
the use of the Equipment,
all as more fully set forth in
Article 2.1 of the LGK
Agreement.

 

4.            Term
of the Agreement.
The initial term of this
Agreement (the “Term”) shall commence as of the
date hereof and, unless earlier
terminated in accordance with the
provisions of this Agreement
or extended pursuant to Paragraphs 15
or 18 below, shall
continue for a period of ten (10)
years following the date of
the performance of the first clinical Gamma Knife procedure
at the Site (the “First
Procedure Date”). JFK shall become
liable to GKF for the payments referred to in
Paragraph 7 herein
below upon the First Procedure Date.

 

5.            Costs
of Site Preparation: Costs of Installation. JFK 's
obligations shall include preparation of plans
and specifications for the construction
and preparation of the
Site in such form
as will result in the Site, when constructed in.
accordance with such plans and
specifications, being in full compliance with Elekta's
Site Planning Criteria. JFK shall, at its own expense and risk, prepare, construct
and make ready the Site as necessary for the installation
of the Equipment, including, but not limited
to, providing any temporary and/or
permanent shielding for the
charging of the Equipment and its use, selecting
and preparing a proper
foundation for the Equipment
and the shielding, properly aligning the
Site, and installing all wiring . JFK
shall be financially responsible for the positioning
of the Equipment on its foundation
at the Site.

 

JFK
shall, at its own expense and risk, select, purchase, install
and maintain all radiation monitoring equipment and 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 and
regulations.

 

Upon completion
of the Site, JFK shall warrant that
the Site will be safe
and suitable for the use of the
Equipment. JFK shall fully indemnify and
hold harmless GKF (and its
members and their respective
officers, directors, agents, employees and affiliates)
for any loss, liability, damage, action, claim, cost or
expense (including reasonable attorneys' fees) which GKF may suffer
or incur which is caused solely by JFK's preparation of
the Site and the positioning
of the Equipment not having been done in compliance
with Elekta's Site Planning
Criteria.

 

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Except
to extent attributable to
JFK 's compliance
with Elekta's Site Planning Criteria, JFK shall be liable for any damages to
the Equipment caused by (a) defects in construction of
the Site or defects in
positioning of the Equipment at the Site;
(b) defects arising out of materials or parts provided, modified
or designed by JFK with respect to the Site; (c) negligent
or intentional acts of omission or commission by JFK or
any of its officers, agents physicians or employees in
connection with the Site preparation; or (d) negligent
operation of the Equipment at the Site. However,
the review and approval of Site plans,
specifications and/or
positioning plans by GKF and/or Elekta shall not relieve
JFK from 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.

 

JFK
warrants that it shall utilize
its best efforts to fulfill
on an expeditious basis its obligations under this Paragraph
5. JFK further warrants that
it shall on a regular basis
keep GKF informed of JFK's
progress in fulfilling its
obligations pursuant to this Paragraph 5.
Should JFK not have all Site
preparations completed so that the Site is
acceptable for positioning and installation of the Equipment
by the scheduled delivery
date specified in a separate written agreement plus a sixty (60) day
grace period (the “late
completion date”),
JFK shall reimburse GKF upon
written request for GKF's
actual financing costs (which financing costs shall not
exceed interest at the
prime interest rate of Citibank, N.A. 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 in order to allow
for the positioning and installation
of the Equipment. As
of the date of this
Agreement, GKF's estimated financing costs based upon the
costs of the Equipment is approximately Thirty Thousand Dollars ($30,000
.00) per month, which amount may
be subject to increase
or decrease based upon subsequent changes in the
prime interest rate.

 

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 27 below) (the “late delivery date”),
GKF shall reimburse JFK upon written request
for JFK's actual financing
costs (which financing costs shall not exceed interest at
the prime interest rate of Citibank, N.A. plus
2%) based upon JFK
'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.            [Intentionally
Omitted]

 

7.            Per
Procedure Payments. Except as set forth in this Paragraph
7, JFK shall pay to GKF
a per procedure payment of Nine Thousand Five Hundred
Dollars ($9,500) for the use
of the Equipment. A procedure shall
be defined as a single patient
treatment session that may include one
or more isocenters during that session.
JFK shall be billed on
the fifteenth (15th) and the
last day of each month for
the actual number of procedures
performed during the first and second half of
the month, respectively. JFK
shall pay the procedures
invoiced within forty- five (45) days after
being invoiced by GKF. Interest
shall begin to accrue
at the rate of 1-1/2%
per month on all invoices
remaining unpaid after
sixty (60) days. JFK
acknowledges that its
current Medicare reimbursement rate for DRG
1 is Fourteen Thousand Three Hundred Nineteen Dollars
($14,319).
If at any time the
Medicare reimbursement rate
paid to JFK for DRG
1 shall be less than Eleven
Thousand Five Hundred Dollars ($11,500), JFK and GKF shall
renegotiate the per procedure
payment rate set forth hereinabove to reflect
JFK's reduced Medicare
reimbursement rate for DRG
I. As consideration
for GKF's renegotiation
of the per procedure payment
rate, at that time, JFK
and GKF shall review and adjust the
technical fee amounts then being charged
or billed by JFK for all Gamma Knife procedures
(i.e., procedures performed for
Medicare patients and non-Medicare patients).

 

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As
a means to permit JFK to perform charity care for persons
who require Gamma Knife procedures,
who are not covered by Medicare, Medicaid or private
insurance programs (whether indemnity, preferred provider,
health maintenance organization, etc.) and who do not have
the means to pay for
such procedures based upon state adopted standards of indigency,
GKF shall waive the per procedure payment
described in this Paragraph
7 for one (1) Gamma Knife procedure for each twenty-five
(25) Gamma Knife procedures performed under this Agreement
by JFK for which a per
procedure payment is made
to GKF in the manner described
herein. JFK shall be solely responsible (and
GKF shall not in any manner be or become responsible) to
determine (a) whether any person
described herein requires a Gamma Knife procedure, (b) who shall receive
a Gamma Knife procedure hereunder if more
than one (1) person
described herein requires a Gamma Knife procedure, and
(c) whether any person meets the
standards of indigency. JFK shall provide reasonable
written documentation evidencing satisfaction of the
conditions set forth herein to GKF
at or prior to the time of payment in
order for GKF to waive
the per procedure payment
for charity care purposes.
Except as set forth herein, JFK
shall pay to GKF the per
procedure payment set forth in this Paragraph
7 for each Gamma Knife procedure regardless of the ability of the patient to pay for
such services or the amount of reimbursement or payment received
by JFK for such procedure.

 

8.            Use
of the Equipment.
The Equipment may be used by JFK only at the
Site and shall not be removed therefrom. JFK
shall not assign or sublease the
Equipment or its rights hereunder without
the prior written consent of GKF; which consent shall
not be unreasonably withheld or delayed.
No assignment or sublease shall relieve JFK
of any of its obligations hereunder. JFK shall not use
nor permit the Equipment
to be used in any manner
nor for any purpose for
which, in the opinion of Elekta or GKF, the
Equipment is not designed or
reasonably suitable. JFK shall not permit
any liens, whether
voluntary or involuntary, to attach to
the Equipment, without the prior written
consent of GKF. JFK shall have no interest in the
Equipment other than the rights acquired as a lessee hereunder and the Equipment
shall remain the property of GKF regardless of the manner in which it may be installed or
attached at the Site. JFK shall, at GKF's
request, affix to the Equipment tags,
decals, or plates furnished by GKF, indicating GKF's ownership of the Equipment.

 

9.            Additional
Covenants of JFK. In addition to the other covenants made by JFK, JFK shall, at its own cost and expense:

 

(a)          Provide
properly trained professional, technical and support personnel
and supplies required
for the proper performance of medical procedures utilizing the Equipment.

 

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(b)          Protect
and hold GKF harmless from and against all medical and
financial responsibility for the diagnosis, treatment and care
of JFK's patients.

 

(c)          Fully
comply with all of its obligations under the LGK Agreement.

 

(d)          Fully
indemnify, hold harmless and/or reimburse
GKF on a prompt basis

as follows:

 

(i)          From
and against any and all damages to the Equipment (including
any damages arising out of or related to violations by JFK, its agents, officers,
physicians, employees, successors and
assigns of the Service Agreement described in Paragraph 16 hereof),
together with reasonable attorneys fees incurred by GKF to establish or enforce its right to indemnity hereunder, to the extent
such damages are caused by the negligent or wrongful acts
or omissions of JFK, its agents, officers, physicians,
employees, successors and assigns. In the event the Equipment
is destroyed or rendered
unusable, this indemnification 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.

 

(ii)         From
and against any and all claims,
liabilities, obligations, losses, damages, injuries, penalties, actions, costs and expenses (including reasonable attorneys'
fees) for all events
and/or occurrences
described in Article 7.3 of the LGK Agreement to the same extent
that JFK agrees to indemnify Elekta thereunder.

 

The indemnification obligations
of JFK under this Paragraph 9(d) shall exclude any
claims or damages arising
out of or related to GKF's
breach of its obligations under the Purchase Agreement, Elekta's
breach of its obligations under
the LGK Agreement, or any defects in. the Site
Planning Criteria.

 

(e)          Provide
reasonable and customary marketing materials (i.e. brochures, announcements, etc.), marketing support,
and an administrative and physician (i.e. seminars by
neurosurgeons and radiation therapists to referring physicians,
etc.) commitment to this clinical service. 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, JFK shall submit for
approval to GKF a proposed marketing budget and plan for the clinical service
to be supported by the Equipment for
the succeeding twelve (12) month period of the Term. GKF shall not unreasonably withhold, delay or condition its approval of the
marketing budget and plan, and the same shall be deemed
approved by GKF unless, within thirty (30)
days after receipt
thereof, GKF notifies JFK in writing of its exceptions
thereto. In such event, the parties shall
promptly confer to resolve such exceptions and any other disagreements related to the marketing
budget and plan . Once
approved, the marketing budget and plan shall
be implemented by JFK in accordance with its terms. As
funds are expended by JFK in accordance with the marketing
budget and plan, JFK shall submit invoices (together with
documentary evidence supporting the invoices) for its expenditures
and, promptly following the receipt of such invoices, GKF
shall reimburse JFK for fifty percent (50%)
of the expenditures up to the limit of Fifty Thousand
Dollars ($50,000.00) per year.

 

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10.          Additional
Covenants, Representations and Warranties of GKF. In addition to the other covenants,
representations and warranties, made by GKF in this Agreement:

 

(a)          GKF
represents and warrants that GKF has full power and authority
to enter into this Agreement, and that this Agreement does not and will not violate any
agreement, contract or instrument binding upon GKF.

 

(b)          GKF
represents and warrants to JFK that, upon delivery of the
Equipment to JFK, GKF shall
use its best faith efforts
to require that Elekta meets its contractual obligations
to GKF and to put the Equipment, as soon as 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.

 

(c)          GKF
represents and warrants that throughout the Term of this Agreement, JFK shall 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
under Elekta's Purchase
Agreement with GKF.

 

(d)          During
the entire Term of this Agreement and subsequent
extension thereof, GKF shall
maintain in full force and effect: (i) the Service Agreement
referenced in Paragraph 16 hereof; and (ii) any other
service or other agreements
required to fulfill GKF's obligations to JFK pursuant to
this Paragraph 10(d). GKF represents and warrants that during the entire Term of this Agreement and any subsequent
extensions thereof it will fully pursue any and all remedies it may have against Elekta
under the Service Agreement
to insure that the Equipment will be in conformity with
Elekta's warranties so that it is free from defects in design, materials, and workmanship which result in noncompliance with
the specifications and/or
Elekta's warranties to GKF. In no event, however, shall
the warranty obligations of GKF to JFK with
respect to the Equipment be greater
or more extensive than Elekta's warranty
obligations to GKF with respect to the Equipment.

 

(e)          GKF
shall fully indemnify and hold harmless JFK in the event
that JFK suffers any loss,
damage, claim or expense (including reasonable attorneys '
fees) solely as a result of
GKF's breach of
the Purchase Agreement or GKF's
failure to enforce the
Service Agreement (but
only to the extent that
the primary obligation to enforce
the Service Agreement
is not assigned by GKF to JFK
pursuant to Paragraph 16
below).

 

11.          Ownership/Title.
It is expressly understood
that JFK shall acquire no right,
title or interest
in or to the Equipment,
other than the right to
the possession and use of
the same in accordance
with the terms of this
Agreement.

 

GKF
may at its sole
discretion finance the Equipment. Financing maybe
in the form of an installment loan, a
capitalized lease or other commercially
available debt or financing
instrument. Should GKF finance the Equipment through
an installment loan, GKF
shall be required to
provide the Equipment as collateral against the loan. Should
GKF finance the Equipment through a capitalized lease,
tit le shall vest with the lessor
until GKF exercises its buy- out option. 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. JFK's
interest under this Agreement shall be subject to
the interests of the
Lender.

 

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GKF
and JFK acknowledge that GKF has
not finalized the principal terms and conditions of its financing agreement, lease
or loan (collectively
a “financing agreement”) with the Lender in
connection with the Equipment
subject to this Agreement.
GKF shall notify JFK when it receives
a firm written commitment from the Lender setting forth
the principal terms and conditions
of the financing agreement for the
Equipment subject to this Agreement. lf
the firm written commitment received
from the Lender contains
a cross-default provision
as one of the principal terms and
conditions of the financing agreement (a) GKF shall so
notify JFK as a part
of the written notice
given to JFK in
accordance with the preceding sentence,
and (b) during the thirty (30) day
period after such written notice is given
to JFK, JFK shall have the right to
terminate this Agreement by giving
a written notice of termination
to GKF. If JFK exercises
its right of termination,
this Agreement shall terminate as
of the end of such thirty
(30) day period, all
parties shall thereafter
be excused from the performance of
any obligations or duties hereunder, and neither GKF or
JFK shall have any recourse (whether legal,
equitable or otherwise) against the other
for any claims in any manner arising out of or related to such
termination. If JFK does
not exercise its right of
termination during such thirty (30) day
period, this Agreement shall continue in full force and effect in
accordance with the provisions hereof

 

GKF
shall instruct the Lender to
notify JFK within ten (10)
days of any payment
defaults by GKF under the
financing agreement for the Equipment installed at the
Site (a “Payment Default “).
In the event of a Payment Default,
if GKF has not provided reasonably satisfactory
evidence to JFK that
it has cured the Payment Default within
twenty (20) days after
JFK's receipt of the default notice from the
Lender, JFK may, in its sole
discretion, cure the
default on behalf of GKF by payment
of the amounts due directly to the Lender and, in
such event, JFK may offset
subsequent payments owing to
GKF pursuant to Paragraph
7 above (i.e., the per procedure payments) against the
amount paid by JFK to
the Lender until JFK is reimbursed in full. Once it is reimbursed in
full, JFK shall again make all
payments to GKF when and as required
pursuant to Paragraph 7. above.

 

12.          Cost
of Use of the Equipment.
Except as is otherwise provided
herein, JFK shall bear the entire
cost of using the Equipment during
the Term of this Agreement. This
shall include, but not be limited to, providing trained professionals, technical and
support personnel and supplies to
properly operate the Equipment. JFK shall be fully responsible
and liable for all
acts and/or omissions of such professional,
technical and support personnel.

 

13.          Taxes.
GKF shall pay any personal
property taxes levied against the Equipment
and any other taxes
or governmental fees or assessments, however denoted,
whether of the federal
government, any state government or any local
Government, levied or based on this Agreement
or the use of the
Equipment except for those taxes, if any,
pertaining to the gross income
or gross receipts of JFK.

 

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14.          Maintenance
and Inspections. Subject
to the assignment of
its rights under the Service
Agreement to JFK pursuant to
Paragraph 16 below and the responsibilities of
Elekta thereunder, GKF agrees to
exercise due and proper
care in the maintenance
of the Equipment and to
keep the Equipment
in a good
state of repair, reasonable wear
and tear excepted. A
maintenance schedule for the Equipment
is attached hereto as Exhibit 3. JFK shall be
liable to GKF for all damage to the Equipment
caused by the misuse, negligence,
improper use or other intentional or
negligent acts or omissions of JFK's employees, officers,
agents, and physicians.
JFK 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 that is not
covered by the Service Agreement
described in Paragraph 16 below.

 

GKF
and Elekta shall have the right of access to
the Equipment for the purpose of
inspecting same at all reasonable
times and upon reasonable notice and
with a minimum of interference
to JFK's operations.
In the event the Equipment
is improperly used by JFK
or its employees, agents,
officers, and physicians, GKF may
service or repair the same
as needed and such expense shall be
paid by JFK, unless the repair is covered by the Service
Agreement described in Paragraph 16 hereof.

 

Any
work so performed by or
in the service or maintenance
of the Equipment as
a result of JFK's failure or neglect
to do so shall not deprive GKF
of any of its rights,
remedies or actions against JFK for damages caused by such
failure or neglect.

 

15.          Equipment
Modifications/Additions/Upgrades.
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 JFK. In
the event GKF and JFK agree to reload
the Cobalt-60 source (i.e., in
approximately the eighth
(8th) year of the Term), GKF shall pay
the costs associated therewith and, notwithstanding any
provision s to the
contrary herein, the initial Term shall be
extended for an additional five (5)
years (i.e., the Term is
extended from 10 to 15 years).

 

16.          Service
Agreement. GKF
warrants that, simultaneously with the
execution of this Agreement, it shall
enter into a Service Agreement
with Elekta (the “Service
Agreement”), a copy of which
is attached as Exhibit F to
the LGK Agreement (attached hereto as
Exhibit 1) and incorporated herein
by this reference. Following the execution
thereof and subject to
the consent of Elekta, GKF shall assign to JFK
in writing all of its
rights arising under the Service
Agreement, including the right to enforce the
provisions thereof directly against Elekta. By virtue
of said assignment, GKF shall be relieved of all responsibility
and shall not in any
manner be or become
liable for the performance of
the Service Agreement
by Elekta or any other person. Notwithstanding
the assignment, GKF shall continue to
use its best efforts to cause
Elekta to perform its obligations under
the Service Agreement in a timely manner.

 

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17.          Termination.
If, after the initial
twenty-four (24) month following the
First Procedure Date and
each subsequent twelve (12) month
period thereafter, as soon as reasonably possible following
a written request therefor, JFK has
not provided GKF with a reasonable economic
justification for GKF to
continue to provide the
Equipment pursuant to this Agreement (which reasonable
economic justification may include,
but not be limited to, JFK's utilization
of the Equipment,
GKF's acquisition costs, financing
costs, and service and maintenance costs
for the Equipment, and a reasonable
return on GKF's investment),
GKF shall have the option to
terminate this Agreement by giving a written notice of
termination to JFK not
less than ninety (90) days prior to the termination date
designated in GKF's written notice.
If JFK objects to GKF's
notice of termination,
JFK shall give written notice of
its objections to GKF not
less than sixty (60) days prior to GKF's
designated termination date. In such event, the
parties shall confer to attempt
to resolve JFK's objections. If
the parties cannot resolve the objections,
the matter shall be
submitted to arbitration
in the manner described
in Paragraph 29(d) below.
Notwithstanding the foregoing,
in the event that
GKF elects to terminate this Agreement in the manner provided
herein, JFK shall have the option
to purchase the Equipment from GKF on the
termination date on the same
terms as described
in Paragraph 18(a)(ii) below by giving
written notice to GKF of the
exercise of its option
not less than thirty (30) days
prior to the designated termination date. The purchase
price for the Equipment
shall be payable by JFK
to GKF in cash on the designated termination date.

 

18.          Options
to Extend Agreement.

 

(a)          JFK
shall have the option at the end of the
initial Term to:

 

(i)          Renegotiate
this Agreement for a
specified renewal term taking into account the
use (e.g., number of
procedures, etc.) of the
Equipment at the Site
during the initial Term.

 

(ii)         Purchase
the Equipment from GKF for cash (or other immediately available
funds) at its then
fair market value (based upon the “in
use” value of the Equipment),
but excluding any value attributable to
the Site, as determined by a
qualified independent appraiser or appraisal company
agreed upon by GKF
and JFK. The qualified independent appraiser or appraisal
company (or its principals or employees) shall be
a member of a nationally
recognized appraisal society or association of business appraisers and have
at least five (5) years
experience in the appraisal of Gamma Knife equipment and
other similar high technology medical equipment. If
GKF and JFK are unable to agree
upon the selection of an independent
appraiser, each shall name two (2)
qualified independent appraisers (i.e., a total
four (4) named appraisers), the name of
each designated independent appraiser shall be
written in black ink
on a blank sheet of white paper
(i.e., one name on each sheet of paper), each
sheet of paper shall be placed
in an identical blank
white envelope and sealed (i.e., four
(4) separate envelopes) and the then serving Chief Executive
Officer of JFK shall randomly pick one of the
envelopes in the presence of
a representative of GKF.
The name of the independent appraiser in the envelope
picked by the Chief Executive Officer shall serve for purposes
hereof.

 

(iii)        Terminate
this Agreement. If JFK terminates this Agreement at
the end of the initial
term, GKF shall remove
the Equipment from the Site
not more than ninety (90) days
after the expiration of the initial Term.

 

JFK shall exercise one
(1) of the three (3)
options referred to above, by
mailing an irrevocable written
notice thereof to GKF at the
address provided pursuant to Paragraph 23
below by registered mail, postmarked 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 JFK
elects to exercise its
option and states which of the three (3)
options referred to above JFK is
exercising.

 

    9 

     

    

  

19.          No
Warranties by GKF.
JFK warrants that as
of the First Procedure
Date, it shall have (a)
thoroughly inspected the Equipment; (b) determined
for itself that all
items of the Equipment
are of a size, design, capacity and
manufacture selected by it; and
(c) satisfied itself that to the best of its knowledge
the Equipment is suitable
for JFK's stated purposes. GKF SUPPLIES THE EQUIPMENT
“AS IS”. 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, DESIGN, CONDITION, DURABILITY, CAPACITY,
MATERIAL OR WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR
THE LIKE, it being agreed
that all such risks, as between
GKF and JFK, shall be borne by JFK.
JFK agrees to look solely to
the Elekta or to the other
suppliers of the Equipment (and its software) for any
and all warranty claims. To the extent Elekta makes
any warranties with respect to the Equipment
for the benefit of GKF
which are not also
made for the benefit of, or are not
directly enforceable by, JFK
under the LGK Agreement,
GKF shall assign to JFK
in writing all of its
rights arising under said
warranties, including the right to
enforce the provisions thereof
directly against Elekta. Assignment of GKF's
warranty rights shall be
subject to the consent of Elekta. By virtue
of said assignment, GKF shall be
relieved of all responsibility
and shall not in any
manner be or become
liable for the performance of
the warranties by
Elekta or any other person. Notwithstanding
the assignment, GKF
shall continue to use its
best efforts to cause Elekta to perform
its warranty obligations in a timely manner. 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. GKF shall not be responsible
for any direct or indirect consequential loss or damage
suffered or incurred by JFK
resulting from the
installation, operation or use of
the Equipment or otherwise. JFK 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.

 

20.          Events
of Default by JFK and Remedies.
The occurrence of any one of the following
shall constitute an Event of Default hereunder:

 

(a)          JFK
fails to pay any installment
of semi-monthly procedure payments when due pursuant to
Paragraph 7. above and such default continues
for a period of thirty
(30) days after written
notice thereof from GKF or its
assignee is given to
JFK;

 

(b)          JFK
attempts to remove, sell, transfer,
encumber, sublet or part
with possession of the Equipment or
any items thereof, except
as expressly permitted herein;

 

(c)          JFK
shall fail to observe or perform
any other material obligations
required to be observed or performed
by JFK hereunder and
such failure shall continue uncured
for thirty (30) days
after written notice thereof to JFK
by GKF; however, if
a breach or failure
reasonably requires more than thirty (30) days
to cure, then an Event of Default shall
not occur if JFK commenced to
cure the breach or failure
during the initial thirty (30) day
period and diligently pursues the cure
to completion as soon as reasonably
possible following the end
of the initial thirty (30) day
period;

 

    10 

     

    

  

(d)          JFK
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; or

 

(e)          Within
sixty (60) days after
the commencement of any proceedings
against JFK 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 JFK 's 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.

 

Upon the
occurrence of an Event of Default, GKF
may at its option do
any or all of the following:
(i) by notice to JFK, terminate this Agreement as to the
Equipment, wherever situated, and for such purposes, enter upon the Site
without liability for so doing or GKF may
cause JFK and JFK hereby agrees to return the
Equipment to GKF at JFK's sole
cost and expense; (ii) recover from JFK as liquidated damages
for the loss of the bargain and not as a penalty an amount
equal to the present value of the unpaid estimated future lease payments to be
made by JFK to GKF through
the end of the Term discounted at the rate
of nine percent (9%), which payment shall become immediately
due and payable and which unpaid estimated future lease
payments shall be based on the prior twelve (
12) months lease payments
with an annual five (5%) percent increase; or (iii) sell,
dispose of, hold, use or lease
the Equipment, as GKF in its sole
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 then
owned or leased by GKF).
In any event, JFK shall, without further demand, pay to
GKF an amount equal to all
sums due and payable
under Paragraph 7 above for all periods up to and
including the date on which GKF had
declared this Agreement to be in default.

 

In
the event that GKF elects to terminate this
Agreement in the manner provided herein
because of an Event of Default, JFK
shall have the option to
purchase the Equipment from GKF on the termination date
by giving written notice to GKF
of the exercise of the option not more
than thirty (30) days after
the date of the occurrence
of the Event of Default. In
the event JFK exercises the option
during the applicable period, the purchase
price to be paid by
JFK to GKF for the Equipment shall be
an amount equal to the
fair market value of the Equipment determined in the same
manner as described in Paragraph l 8(a) (ii) above as if
the purchase occurred on the expiration of the Term (i.e.,
the fair market value at the end of 10
years). The purchase price
for the Equipment shall be payable
by JFK to GKF in
cash not more than thirty (30) days following the exercise
of the option. The payment
of the purchase price by
JFK to GKF under this
paragraph shall be in addition to, and not supplant or
replace, any damages or other amounts for which JFK
may be liable to GKF under this Agreement
as a result of the Event of Default, including, without
limitation, the damages
described in subpart (ii) of the preceding paragraph.

 

    11 

     

    

  

In
the event JFK shall have paid
to GKF the liquidated
damages amount referred to
in subpart (ii) of the second preceding
paragraph, GKF shall pay to JFK promptly 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 expenses incurred by GKF,
said amount never to exceed the
amount of the liquidated damages paid by JFK);
however, GKF shall not be
required to pay to JFK
any amount received by GKF as a result of the exercise
of the option to purchase pursuant to
the immediately preceding paragraph . GKF shall use
its reasonable efforts to sell
or relet the Equipment; however, GKF shall have no obligation
to sell or relet the Equipment. JFK shall in any event
remain fully liable for reasonable
damages as 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. JFK hereby agrees that, in
any event, it shall be liable for any deficiency after
any sale, lease or other disposition of the Equipment by
GKF. The rights afforded
GKF hereunder shall not
be deemed to be exclusive, but shall
be in addition to any
other rights or remedies provided by
law.

 

21.          Events
of Default by GKF and Remedies.
The occurrence of any one of the following shall constitute
an Event of Default hereunder:

 

(a)          GKF
shall fail to observe or perform
any of its material obligations
required to be observed or performed
by GKF hereunder and such failure shall continue uncured
for thirty (30) days
after written notice thereof by
JFK to GKF; however, if
a breach or failure reasonably
requires more than thirty (30) days to
cure, then an Event of Default
shall not occur if
GKF commenced to cure
the breach or failure during
the initial thirty (30) day period
and diligently pursues the cure to
completion as soon as reasonably possible following the
end of the initial thirty (30)
day period;

 

(b)          Lender
declares GKF in default
under any financing agreements
entered into by GKF to
finance the acquisition of the Equipment
(subject to the lapse of all applicable cure periods
without the remedy
of the default by GKF);

 

(c)          GKF
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; or

 

(d)          Within
sixty (60) days after the commencement of any proceedings
against GKF 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 GKF’s 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.

 

    12 

     

    

  

Upon
the occurrence of an Event of Default,
JFK may at its option do any or all of the following:
(i) by notice to GKF, terminate this Agreement as
to the Equipment and, in such event, GKF shall remove
the Equipment at GKF's sole cost and expense or, in the
absence of removal by GKF within a reasonable period of
time after a written request
therefor, for JFK to remove the Equipment
with all due care and store the
Equipment at GKF's sole cost and expense; or (ii) to recover
from GKF such damages as may be realized by
JFK from the loss of the bargain . GKF
shall in any event remain fully liable
for reasonable damages as
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. However, GKF shall not in any manner
be or become liable
to JFK for any consequential
damages arising out of
or resulting from the Event of
Default. The rights afforded
GKF hereunder shall not
be deemed to be exclusive,
but shall be in addition
to any other rights
or remedies provided by law.

 

Notwithstanding
the foregoing, in the
event that GKF elects
to terminate this Agreement in the manner provided herein as
a result of an Event of Default, JFK shall have the option
to purchase the Equipment from GKF on the
same terms as described
in Paragraph 18(a)(ii) above by giving
written notice to GKF of the
exercise of its option not more than thirty (30)
days after the date
of the occurrence of the Event of Default. The purchase
price for the Equipment
shall be payable by JFK to
GKF in cash not more than thirty
(30) days following the exercise of the
option.

 

22.          Insurance.

 

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

 

(b)          During
the Term of this Agreement,
JFK shall, at its own cost and expense, keep in effect
public liability and professional
liability insurance policies concerning the operation
of the Equipment by JFK. Said policies shall be
in the amounts of not less than
$1,000,000 per occurrence and $5,000,000 annual aggregate.
GKF shall be named as additional insured party on the insurance policies to be
maintained hereunder by JFK. The policies
to be maintained by
JFK hereunder shall be evidenced by
a certificate of insurance or other reasonable documentation
which shall be delivered by JFK
to GKF no later than the First Procedure Date
and as of each annual renewal of
such policies during the
Term. As an alternative to providing the insurance
policies described herein, JFK may protect
against the risks covered
by public liability and professional
liability insurance policies through a reasonably funded self-insurance program. In
the event JFK elects to provide the coverage
described herein through a self-insurance
program, upon the commencement of the
Term and as of each commencement of each twelve (12)
month period thereafter,
JFK shall provide written documentation to
GKF evidencing (a) the establishment and existence of the
self-insurance program, (b) the
reasonable funding of the self-insurance
program based upon the risks
described herein and the other risks intended to
be covered by the program, and (c) GKF's
rights as a party entitled to protection from the self-insurance program for
the risks described herein.

 

    13 

     

    

  

(c)          If
the Equipment is rendered unusable
as a result of any physical damage to, or
destruction of, the
Equipment, JFK shall give to GKF immediate notice thereof.
GKF shall determine, within thirty (30) days after the
date of occurrence of such damage or
destruction, whether the Equipment can be repaired. In the event
GKF determines that the Equipment cannot be repaired,
GKF, at its sole cost and expense, shall replace the Equipment
as soon as reasonably possible based upon the availability
of replacement equipment from Elekta and within the limits of Elekta's
manufacturing capabilities. The replacement
equipment shall be the same
or a similar model (based upon the models for the Gamma
Knife units then manufactured by Elekta) as the
Equipment subject to this Agreement.
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.

 

23.          Notices.
Any notices required under this Agreement shall be
sent in writing and
shall be deemed to have
been duly given if delivered by hand or
mailed by certified or registered mail
to the following addresses:

 

	To GKF:	Mr. Craig K. Tagawa
	 	Chief Executive Officer
	 	GK Financing, LLC
	 	Four Embarcadero Center, Suite 3620
	 	San Francisco, CA 94111
	 	 
	To JFK:	Mr. Scott Gebhard
	 	Senior Vice President
	 	JFK Health Systems
	 	65 James Street
	 	Edison, NJ
	 	08818-3059
	 	 
	With copies to:	Sean Patrick Murphy, Esq.
	 	Vice President and General Counsel
	 	JFK Health Systems
	 	80 James Street
	 	Edison, NJ 08818-3059

 

    14 

     

    

  

	 	Mr. Ray Fredericks
	 	Senior Vice President & Chief Financial Officer JFK Health Systems
	 	80 James Street
	 	Edison, NJ 0881 8-3059

 

Or
to such other addresses as either party
may specify for the reception of
notice from time to
time in writing to
the other party. Any such
notice shall be effective only when actually received
by the party to whom
addressed.

 

24.          Integration.
This Agreement and all Exhibits attached hereto contain
the full and entire agreement between
the parties hereto, and
no oral or written understanding
is of any force or effect whatsoever unless expressly
contained in a writing executed subsequent to
the date of this Agreement.

 

25.          Waivers.
To the extent that
a party fails or chooses not to pursue any
of its remedies under this Agreement or pursuant
to applicable law, such
failure or decision not to act shall not prejudice such
party's rights to pursue any of those
remedies at any future time and
shall not constitute a waiver of its rights.

 

26.          Assignments.
This Agreement is binding upon and
shall inure to the benefit of the
permitted successors or assigns of the respective parties
hereto, except that neither party may
assign its rights
or obligations under this Agreement without the
express written consent of the other
(which consent shall not be unreasonably withheld).

 

27.          Amendments.
This Agreement shall not be amended or altered in
any manner unless such
amendment or alteration is in a writing signed by
both parties.

 

28.          Record-Keeping
Requirements. To the extent required
by the regulations promulgated
by the Health Care Financing Administration pursuant to
Section 952 of the Omnibus Reconciliation Act of 1980,
GKF shall:

 

(a)          Until
the expiration of four (4) years following the furnishing
of services pursuant to this Agreement, GKF agrees to make
available upon written request
of the Secretary of Health and Human Services or the U.S.
Comptroller General or any of their duly authorized
representatives, this Agreement, any books,
documents and records necessary to verify
the nature and extent of costs incurred
by JFK by reason of
the activities of GKF under
this Agreement; and

 

(b)          If
GKF elects to delegate any of its duties under this Agreement
(which have a cost or value of Ten Thousand Dollars ($10,000.00)
or more over a twelve (12) month
period) to a related organization, GKF may do so
only through a subcontractor which is consented to
by JFK, it being understood that, inasmuch as
JFK is entering into
this Agreement in reliance on GKF's reputation and expertise, that
JFK shall be the sole
judge of the reputation
and expertise of the proposed delegee, and only through
a subcontractor which provides that, until the expiration
of four (4) years
following the furnishing of services under
such subcontract, the related
organization shall make available, on request
of the Secretary of
Health and Human Services or the U.S.
Comptroller General or any of
their authorized representatives, the subcontract,
and books, documents and records
of the nature and extent
of costs incurred by JFK by reason of activities of such
related organization under
such subcontract. No delegation by
GKF of its duties hereunder
shall relieve GKF from
liability hereunder.

 

    15 

     

    

  

29.          Miscellaneous
Provisions.

 

(a)          Validity.
The invalidity or
unenforceability of any portion
or provision of this
Agreement shall not effect
the validity or enforceability of
any other portion, nor shall
either party's implied or express consent
to the breach or waiver of any provision of this Agreement
constitute a waiver of such provision as to
any subsequent breach.

 

(b)          Attorneys
Fees. In the event of
any claim or controversy arising hereunder, the prevailing
party in such claim
or controversy shall be entitled
to a reasonable attorneys'
fee in addition to
whatever other relief said party would
be otherwise entitled. The prevailing
party shall be determined by the
arbitrators pursuant to an arbitration conducted in
accordance with Paragraph 29(d)
below.

 

(c)          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 commence performance
of their respective obligations
under this Agreement.

 

(d)          Arbitration.
Any controversy or
claim between the
parties arising out of or relating to this Agreement
shall be submitted to
arbitration in accordance
with the then current Commercial Arbitration Rules
of the American Arbitration Association, with
the arbitration to
be conducted in Washington, D.C. The
award of the arbitrators shall be
final and binding upon the parties hereto.
Judgment upon the award issued by the
arbitrators may be entered
in any court of competent jurisdiction.

 

(e)          Confidentiality.
GKF and JFK shall keep the terms and conditions of this
Agreement strictly confidential and neither party shall
(except as required by applicable law,
regulation or legal process, and
only after compliance with the remainder of this
paragraph), without the prior written
consent of the other party,
(i) disclose any of
the terms and conditions of this
Agreement in any manner whatsoever,
and (b) will not use any of
the terms and conditions of this
Agreement in any manner
whatsoever other than in connection with
the performance of their respective obligations hereunder. In the event
that either GKF or
JFK is, or any
of its representatives are, requested pursuant to, or required by, applicable law, regulation or legal process to disclose any
of the terms and conditions of this Agreement, such party shall notify
the other party promptly so that it may seek a protective order or
other appropriate remedy or, in its discretion, waive compliance with the terms of this paragraph. In the event that no protective
order or other remedy is obtained,
or a party waives compliance with the terms of this
paragraph, the party will furnish only that portion of
the terms and conditions of this Agreement which it is advised by
counsel is legally required and will exercise all reasonable
efforts to obtain reliable assurance that confidential
treatment will be accorded such terms and conditions.

 

[SIGNATURE PAGE AND EXHIBITS
FOLLOW]

 

    16 

     

    

  

IN
WITNESS HEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.

 

	The Community Hospital Group, Inc.	 	GK Financing, LLC,
	dba JFK Medical Center,	 	a California limited Liability Company
	a New Jersey corporation	 	 	 
	By :	/s/ John P. Mcgee  /s/ J. Scott
    Gebhardt	 	By:	/s/  Craig K. Tagawa
	 	 	 	 	 
	 	John P. Mcgee, President and CEO	 	 	Craig K. Tagawa, CEO
	 	J. Scott Gebhrdt, Senior VP-Operations

        [Print Name and Title]
	 	 	

         

        [Print Name and Title]

 

    17 

     

    

 

EXHIBIT 1

 

LGK
AGREEMENT

 

    18 

     

    

 

EXHIBIT 2

 

PURCHASE
AGREEMENT

 

    19 

     

    

 

EXHIBIT 3

 

MAINTENANCE
SCHEDULE

 

    20Exhibit 10.8a

 

ADDENDUM ONE

TO LEASE AGREEMENT FOR A GAMMA
KNIFE UNIT

 

This ADDENDUM ONE TO LEASE AGREEMENT
FOR A GAMMA KNIFE UNIT (this “Addendum”) is dated on January 9, 2008, but is made effective as of July 1, 2002, between
The Community Hospital Group, Inc., dba JFK Medical Center, a New Jersey corporation (“JFK”), and GK Financing, LLC,
a California limited liability company (“GKF”).

 

RECITALS

 

WHEREAS,
on or about December 11, 1996, GKF and JFK executed a Lease Agreement for a Gamma Knife Unit (the “Original Lease”);

 

WHEREAS,
effective July 1, 2002, the parties verbally agreed to modify certain terms of the Original Lease, but inadvertently neglected
to execute a document memorializing the same; and

 

WHEREAS,
the parties desire to enter into this Addendum in order to memorialize their verbal agreement effective July 1 2002, to modify
terms of the Original Lease.

 

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 meaning set forth in the Original
Lease.

 

2.          Per
Procedure Payments. In recognition of the decreases in the Medicare reimbursement rates which occurred after the Original Lease
was entered into, and pursuant to Section 7 of the Original Lease, the per procedure payment for the use of the Equipment shall
be reduced from the per procedure rate set forth in the Original Lease of Nine Thousand Five Hundred Dollars ($9,500) per procedure,
to the following amounts:

 

(a)          From
July I, 2002 through and including December 31, 2002, the per procedure payment payable by JFK to GKF shall be equal to Nine Thousand
Dollars ($9,000) per procedure.

 

(b)          From
and after January I, 2003, the per procedure payment payable by JFK to GKF shall be Eight Thousand Five Hundred Dollars ($8,500)
per procedure.

 

3.          Marketing
Support. The last sentence of Section 9(e) of the Original Lease shall be deleted in its entirety and replaced with the following:

 

“As
funds are expended by JFK in accordance with the marketing budget and plan, JFK shall submit invoices (together with documentary
evidence supporting the invoices) for its expenditures and, promptly following the receipt of such invoices, GK.F shall reimburse
JFK for fifty percent (50%) of the expenditures up to the GKF limit of One Hundred Thousand Dollars ($100,000) per year.”

 

     

     

    

  

4.          Full
Force and Effect. Except as otherwise amended hereby or provided herein, all of the terms and provisions of the Original 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.

 

	GKF:	JFK:
	GK FINANCING, LLC	THE COMMUNITY HOSPITAL GROUP, INC., dba JFK MEDICAL CENTER
	By: /s/ Ernest A. Bates, M.D.	By: /s/ J. Scott Gebhard
	Policy Committee Member	Name: J. Scott Gebhard
	 	Title: EVP/COO

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